Reporting requirement back off
The off again, on again, off again saga of the Corporate Transparency Act continued Thursday and Friday. The latest status of the Beneficial Ownership Information (BOI) reporting rule is this: small businesses do not have to report to the Financial Crimes Enforcement Network, if they don’t want to.
The National Lumber and Building Material Dealers Association on Friday released the following alert:
The Financial Crimes Enforcement Network (FinCEN), which oversees the implementation of the Corporate Transparency Act (CTA), has just released an updated guidance in the aftermath of yesterday's SCOTUS ruling which lifted the temporary nationwide CTA injunction issued by a Texas judge in the case, Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland. FinCEN has stated it will continue to halt the CTA’s reporting requirements due to a separate nationwide injunction.
The statement reads, “On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas. As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force.”
The new guidance issued by FinCEN provides much needed clarity following initial confusion yesterday, with many uncertain of the legal status of the CTA. The Smith injunction was issued on Jan. 7th by an Eastern District Court of Texas Judge. Prior to this morning, FinCEN had not acknowledged the Smith injunction though have since updated their guidance confirming that the Smith nationwide injunction will be observed by FinCEN. Government attorneys in that case have not yet indicated if they would appeal the injunction to a higher court.
While FinCEN’s latest guidance is a relief for the small businesses subject to the CTA’s burdensome reporting requirements, NLBMDA will continue to advocate for a legislative remedy to permanently repeal the law to provide small businesses and LBM dealers with a permanent resolution.
For questions, contact Matthew Delaney, NLBMDA's Government Affairs Coordinator at [email protected].