CRITICAL update on Corporate Transparency Act Following Passage of Federal Spending Bill

It's a big holiday week and work may already be out of mind, but last night’s passage of a bill to avert a federal government shutdown significantly impacts business owners.

While the approved legislation keeps the government running, it does not include an anticipated one-year extension for the Corporate Transparency Act (CTA) Beneficial Ownership Information (BOI) reporting deadline. That’s a significant change from the information we sent provided to clients this week, and we want to ensure you’re fully informed, especially considering that the ruling by a federal judge to prevent enforcement of the CTA still stands.

It’s all very confusing. Here’s what you need to know right now:

1. No Extension for BOI Reporting Deadline:
   The Jan. 1, 2025, deadline for filing BOI reports remains in place. Efforts to include a one-year extension in the bill were unsuccessful, leaving the original timeline intact.
2. Current Injunction Temporarily Halting Enforcement:
   A nationwide court injunction from Texas Top Cop Shop, Inc. v. Garland currently prevents enforcement of the BOI reporting requirement. For now, reporting companies do not need to comply with the Jan. 1, 2025, deadline. However, this injunction is under appeal, and the Department of Justice has requested a decision by Dec. 27.
3. What Happens Next:
   If the injunction is lifted, businesses will need to comply immediately with the CTA’s BOI reporting requirements. This includes disclosing detailed information about beneficial owners and applicants for newly formed entities.
4. Why This Matters to You:
   Noncompliance with BOI reporting rules could result in steep penalties. The timeline is uncertain, and businesses must be ready to act quickly if the injunction is overturned.

We are closely monitoring developments and will keep you updated as the situation evolves. In the meantime, we recommend reviewing your business’ preparedness to meet the reporting requirements because you very well may need to report during the final few days of the year (if you haven't already).

We will continue to monitor this situation and update as needed. Reach out with questions.