The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction, pausing all reporting requirements. This decision has significant implications for business owners and compliance professionals.
What This Means for Businesses
- Existing Companies: Reporting requirements are temporarily suspended.
- Newly formed companies: New companies are also relieved of the reporting requirements for now.
- Penalties: No penalties will be enforced while the injunction remains in place.
- Legal Uncertainty: The government is expected to appeal, and the CTA’s constitutionality may not be resolved for months.
Next Steps for Businesses
- As this is only a preliminary injunction that may be changed or overturned, entities that have not yet filed their BOI Reports should stay apprised of ongoing developments. However, this decision may be appealed and the outcome not settled for months, especially with upcoming changes to administration.
- We advise businesses to continue internal preparations for CTA compliance so they can promptly file should the CTA's requirements be reinstated.
- While not mandatory, entities may choose to proactively submit BOI Reports to the FinCEN database.
- Consult with compliance professionals to understand how this ruling impacts your specific situation.
AGH will monitor developments and provide updates as new information emerges. For questions about BOI filing or related compliance requirements, please contact Shawn Sullivan or Gary Powell at 844.577.1122.
Executive Vice President
Tax Services
Shawn leads the firm’s tax group and serves on AGH’s board of directors. In addition to enhancing business performance to minimize tax consequences, he has extensive experience in mergers and acquisitions, international tax and business structuring. Shawn has public and private experience in the fields of tax and accounting and works frequently with clients in the manufacturing, automotive, wholesale distribution, real estate development and construction industries.
A certified public accountant, Shawn is a member of the American Institute of Certified Public Accountants, the Kansas Society of Certified Public Accountants (KSCPA) and chairs the KSCPA Committee on Taxation.
NOTE: Any advice contained in this material is not intended or written to be tax advice, and cannot be relied upon as such, nor can it be used for the purpose of avoiding tax penalties that may be imposed by the IRS or states, or promoting, marketing or recommending to another party any transaction or matter addressed herein.