CTA Reporting Requirements Back in Effect with Extended Deadline
On February 18th, a decision issued by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al. reinstated the enforceability of the Corporate Transparency Act (“CTA”). Following that decision, FinCEN has issued a notice that the submission of initial Beneficial Ownership Reports (“BOI Report”) will again be required. Given the repeated changes to these rules, FinCEN has provided an extended deadline of March 21, 2025 for these initial filings.
Importantly, FinCEN has noted that, during this extension period, it will continue to assess options for additional deadline extensions, if necessary, to reduce regulatory burden on businesses. Additionally, FinCEN will be exploring ways to ensure reporting by “high risk” entities while also beginning the initiation of a process to revise the BOI Reporting rules to further reduce burden on “lower-risk” entities, such as small businesses in the United States.
Finally, FinCEN has noted that the civil penalty for BOI reporting violations has increased from $500 per day to $606 per day, to adjust for inflation.
Katz Chwat will continue to monitor and provide updates as they become available.