Supreme Court Restores Corporate Transparency Act

Yesterday, the U.S. Supreme Court granted the stay requested by the federal government of the order that blocked the required filing of the “beneficial ownership information” (BOI) report with the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA), pending the disposition of the appeal before the U.S. Court of Appeals for the Fifth Circuit. So far, FinCEN’s website has not been updated to reflect this new information. As of now, the last alert reads: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force.”

Background: If the CTA is found to be constitutional, small businesses with less than $5 million in annual revenue and less than 20 full-time employees would be required to report on their ownership structure, business addresses, and other information to the FinCEN. On December 3, 2024, a federal district court enjoined enforcement of the CTA and its corresponding BOI reporting rule. The federal government appealed, and, on December 23, 2024, a “motions panel” of the Fifth Circuit granted the government’s motion to lift the injunction pending appeal. The Fifth Circuit, on December 26, 2024, vacated its own order now that a “merits panel” has the appeal, “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” Then, yesterday, the U.S. Supreme Court granted a stay of the district court’s injunction, reinstating the filing requirement, pending the disposition of the appeal to the Fifth Circuit.

The problem: The Treasury Department reported in October that it had received just 10% of the required submissions to comply before penalties would begin in 2025. Many attributed the low compliance rate to a lack of awareness among small businesses, insufficient outreach & education from the federal government, and a tight time frame for compliance. The Restaurant Law Center, with other industry allies, filed a brief on December 18, 2024, with the Fifth Circuit, and on January 10, 2025, with the Supreme Court, urging them to deny the motions to stay because granting the stay would result in consequences to the Association’s members that cannot be reversed as our members would face a now unmeetable compliance deadline. Given a deadline that businesses across the nation no longer thought applied to them, the practical implications of the granting of the government’s request to stay the injunction will be severe.

To File or Not to File: If you have already filed your BOI report, you have nothing to worry about. If you have not filed, we expect that now that the district court’s injunction is no longer in force and superseded by the stay, we may see FinCEN establish a new, near-immediate deadline. You can follow the news on BOI reporting directly from the official FinCEN website found here, although it tends to be a day or two late. And, if you want to go ahead and voluntarily file a BOI report, free of charge, you can click here and file through the official FinCEN BOI website.