RCO Law’s Post

Updates on Corporate Transparency Act (CTA) from Bob Jennings at TaxSpeaker. Alabama courts have been busy. On Friday March 1, 2024, the U.S. District Court for the District of Alabama declared the Corporate Transparency Act (CTA) unconstitutional. In the case of National Small Business Association v. Yellen (Case No. 5:22-cv-01448) [1], initiated by the National Small Business United, the challenge was against the CTA's mandate for small businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).   The ruling has the effect of suspending all BOI filing requirements for now, all enforcement actions, and all compliance concerns including questions of "practicing law without a license." Experts believe the ruling will be appealed, probably to the Supreme Court, so this is a temporary filing requirement suspension until a final appeal is exhausted. Voluntary filing appears to still be allowed if for some reason a client desires to file.

Two important things for Corporations to consider. One the filing deadline is coming up Friday March, 15,2024 for corporate filings. Second, On Friday March 1, 2024, the U.S. District Court for the District of Alabama declared the Corporate Transparency Act (CTA) unconstitutional. In the case of National Small Business Association v. Yellen (Case No. 5:22-cv-01448) [1], initiated by the National Small Business United, the challenge was against the CTA's mandate for small businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The ruling has the effect of suspending all BOI filing requirements for now, all enforcement actions, and all compliance concerns including questions of ;practicing law without a license. Experts believe the ruling will be appealed, probably to the Supreme Court, so this is a temporary filing requirement suspension until a final appeal is exhausted. Voluntary filing appears to still be allowed if for some reason a client desires to file.

DEADLINE APPROACHING!!! A new law called the Corporate Transparency Act requires that most U.S. businesses must file a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), providing information identifying individuals associated with your company. If your business was formed before January 1, 2024, you have until January 1, 2025 to make this submission. If your business was formed after January 1, 2024, you must submit within 90 days of the formation of the business. Failure to comply may result in significant penalties – up to $500 for each day you are in violation. The good news is that the submission asks for information you should already have (your EIN etc.) and there's no fee for submitting the report. Here is a link to the Financial Crimes Enforcement Network where there are more details and where the report can be filed. https://www.fincen.gov/boi If you have questions, seek advice from your business lawyer. Bertha Garcia Robinson Tanesha Halstead , Business Operations Strategist Taryn Abrahams, MFT, SHRM-CP Holly Kaplansky Laurel Bernstein Melanie Cunningham

Interesting developments in the world of the Corporate Transparency Act.

While DC obsessed over must-pass year-end legislation, part of another must-pass Congressional compendium from 4 years ago, the Corporate Transparency Act, which imposed ownership disclosure regulations on over 30 million mostly small business entities, was enjoined by a federal court. It’s a reminder that for federal statutory enactments, being inserted into a 1,000-page legislative package is not the end but only the beginning.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a significant ruling in Texas Top Cop Shop, Inc., et al. v. Garland, et al., halting the enforcement of the Corporate Transparency Act (CTA). This decision places a nationwide injunction on the CTA, including its beneficial ownership reporting requirements, citing concerns about its constitutionality and Congressional overreach. The ruling effectively suspends upcoming compliance deadlines for companies classified as "Reporting Companies" under the CTA. As of now, businesses are not required to submit Beneficial Ownership Information Reports (BOIR) to the Financial Crimes Enforcement Network (FinCEN). This is what you should know: 💠 If your company has already submitted a BOIR, no updates are currently required. 💠 Companies that have not filed are not obligated to do so at this time. 💠 Monitoring future developments regarding the CTA is crucial as an appeal is anticipated. This injunction provides temporary relief, but the legal landscape remains uncertain. Businesses should stay informed and seek legal counsel to navigate these ongoing changes. We do not currently offer assistance with Corporate Transparency Act compliance. If you have questions about how this decision impacts your business, please consult with your advisors.

‼️ Important Update: Corporate Transparency Act Reporting Temporarily Halted A recent nationwide injunction issued by the U.S. District Court for the Eastern District of Texas has temporarily paused enforcement of the Corporate Transparency Act (CTA) and delayed the year-end deadline for filing Beneficial Ownership Information (BOI) reports. What does this mean for businesses? Learn more here: https://lnkd.in/eA2qDNMy

I’ll be the first to admit that I didn’t think I’d ever have to worry about the commerce clause or what is “necessary and proper” after passing the bar nearly 10 years ago but here we are! My colleagues Paul Monnin, Brian Frey and I briefly analyze the recent district court decision out of the Northern District of Alabama finding the Corporate Transparency Act unconstitutional in the alert linked below. More to follow! #corporatetransparencyact #fincen #cta

With the end of the year fast approaching, a new ruling from a federal court in Texas has shaken up corporate compliance. The court has issued a nationwide preliminary injunction that halts enforcement of the Corporate Transparency Act and declares the law "likely unconstitutional." This means that entities previously required to file Beneficial Ownership Information Reports (BOIRs), providing personally identifying information of their beneficial owners to FinCEN (the the U.S. Treasury’s financial crimes unit), many of which were due by January 1, 2025, aren’t obligated to comply with this deadline at this time. Key points for businesses include: ✔️ The injunction applies nationwide to all persons and entities covered by the CTA. A different court had issued an injunction against the law in March but made it applicable only to the plaintiffs in that case. ✔️ Businesses will not face penalties if they don’t file BOIRs while the injunction is in place. ✔️ The government has appealed and sought an immediate dissolution of the injunction from an appellate court, which has not yet acted. Thus the injunction could be lifted, possibly before January 1, 2025. ✔️ Businesses should continue gathering the necessary information and completing BOIRs but hold off on submitting them for now. ✔️️ The legal situation is evolving, and filing requirements could change unexpectedly. Businesses should be proactive about checking the status of the appeal. For more detail on this ruling, read our most recent article ▶️ https://bit.ly/4fsy5lY

A Texas Federal Court just granted a nationwide preliminary injunction for Beneficial Ownership Information Reporting. Stay ahead of the curve and understand how this development affects your business. Let's discuss the implications and ensure you're prepared for what's next.