On Monday, February 17, 2025, the United States District Court for the Eastern District of Texas in Smith v. United States Department of Treasury stayed its January 7, 2025, order enjoining the Department of Treasury from enforcing the Corporate Transparency Act (“CTA”) against entities that failed to file beneficial ownership information (“BOI”) reports with the Financial Crimes Enforcement Network (“FinCEN”). Smith v. United States Department of Treasury, No. 6:24-cv-336-JDK (E.D.Tex. Feb. 17, 2025).
In other words, the CTA is back, and beneficial owners of reporting companies are once again required to file BOI reports with FinCEN. Beneficial owners of reporting companies must now file a BOI report by March 21, 2025.
The CTA is a law that went into effect on January 1, 2024, requiring owners of eligible companies, known as “reporting companies,” to file BOI reports with FinCEN, a bureau of the U.S. Department of the Treasury, by December 31, 2024. Plakas Mannos has already written extensively about the CTA, and you can read more about that law and its requirements here.
Since the CTA took effect, its validity has been challenged in several courts. While some courts have upheld its constitutionality, others have questioned it. One significant development occurred on December 3, 2024, when the U.S. District Court for the Eastern District of Texas issued a nationwide injunction banning the enforcement of the CTA’s filing deadlines for BOI reports. Plakas Mannos also covered this development, and you can read more about it here.
Since then, the CTA has been repeatedly “revived” and “overturned” through multiple court rulings. For example, this occurred on January 7, 2025, when the U.S. District Court for the Eastern District of Texas entered an order enjoining the government from enforcing the CTA’s filing deadlines. Smith v. U.S. Dept. of Treasury, No. 6:24-cv-336-JDK, 2025 WL 41924, at *14 (E.D.Tex. Jan. 7, 2025). This decision was subsequently overturned this past Monday, February 17, 2025. Further, President Donald Trump’s January 20, 2025 Executive Order titled “Regulatory Freeze Pending Review,” also sowed further confusion. The impact of this Order on FinCEN’s ability to issue new filing deadlines is uncertain.
The House of Representatives has taken notice of the courts’ constant back and forth concerning the enforceability of the CTA. The uncertainty surrounding the CTA and its ever-changing deadlines has sent mixed messages. Some entities have taken a proactive approach and already filed their BOI reports, while other entities have taken a “wait and see” approach, waiting for another court to “change its mind.”
For this reason, Iowa Republican Representative Zachary Nunn has sponsored the “Protect Small Businesses from Excessive Paperwork Act of 2025.” H.R.736 — 119th Congress (2025-2026). The purpose of this bill, as its name suggests, is to extend the deadline for certain companies that are required to file BOI reports with FinCEN from January 1, 2025, to January 1, 2026. This bill would give entities another year to file their BOI reports, while giving the courts another year to wrestle with the constitutionality of the CTA.
Though the “Protect Small Businesses from Excessive Paperwork Act of 2025” is not yet in effect, the House has passed this bill, and the Senate is now reviewing it. You can track the status of this bill here.
FinCEN, once again, has extended the BOI report filing deadline in light of recent court decisions for many reporting companies. Most reporting companies now have until March 21, 2025, to file their BOI reports.
Though many reporting companies may still choose to take a “wait and see approach,” we recommend that these companies still speak with an attorney and gather all relevant documentation and information needed to file a BOI report. This way, reporting companies are prepared to file a BOI report at a moment’s notice should FinCEN not extend the filing deadline.
The business attorneys at Plakas Mannos are closely monitoring developments related to the CTA and are available to assist business owners with preparing and filing their BOI reports. If you have questions about the CTA or need help with filing your BOI report, please do not hesitate to contact one of our business attorneys.
Gary Corroto is an attorney and partner for Plakas Mannos practicing law in various areas, including commercial litigation, energy, oil and gas, and more.
Hunter Miller is an associate attorney focusing on commercial litigation, mergers and acquisitions, intellectual property litigation, and other practice areas.
Tyler Speer is an associate attorney at Plakas Mannos in various areas including, commercial litigation, corporate transactions and regulatory compliance, employment and workers’ compensation, and more.