5th Circuit Court Allows CTA to be Enforced Pending Appeal ***Update*** 5th Circuit Reverses Itself and Reinstates Injunction; FinCen Seeks Emergency Stay from US Supreme Court; Justice Alito sets Response Date for Plaintiffs

by Richard S. Ekimoto, Esq.

Several hours ago, the 5th Circuit Court of Appeals has issued a stay of the nationwide injunction issued by the Federal District Court in Texas pending appeal. The stay was issued by a two-to-one vote of the three-judge panel of the 5th Circuit Court of Appeals. As a result, incorporated community associations and other reporting companies will be required to file their BOI Report unless they fall within one of the CTA exemptions. It is unclear at this time whether FinCen will provide additional time to file BOI Reports. The FinCen website still states that the filing of a BOI Report is voluntary. It is also possible for the plaintiffs in the case to seek a further review by the whole 5th Circuit Court of Appeals or from the U.S. Supreme Court. The 5th Circuit Court decision does not impact the stay in place for the plaintiffs in a related case arising out of the Federal District Court in Alabama.

December 23, 2024 Update: FinCen has posted on its website that it is extending the deadline to file BOI Reports as follows:

• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial BOI Report.
• Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial BOI Report.
• Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial BOI Report.
• Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025.
• Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

December 27, 2024 Update: Yesterday, the 5th Circuit Court of Appeals reversed itself and set aside its own stay of the Federal District Court injunction of the CTA. What this means is that reporting companies are not required to file pending the appeal of the case. The 5th Circuit Court of Appeals stated:

The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

Those incorporated associations that have not filed their BOI Report can wait until the appeal is decided before filing. We will provide additional information as it arises.

January 2, 2025 Update: On New Year’s Eve, FinCen filed for an emergency stay of the injunction with the U.S. Supreme Court. If granted, the injunction prohibiting FinCen from enforcing the CTA would be lifted and reporting companies would be required to file their BOI Report unless they qualify for an exception. In addition to arguing that the CTA is constitutional, FinCen also argues that if the injunction is to remain in place, it should only apply to the plaintiffs in the Texas Federal District Court case. At this point, incorporated associations without an exemption should monitor the situation since it is not obligated to file a BOI Report. Even if the U.S. Supreme Court stays the injunction, it is likely that FinCen will allow reporting companies additional time to file their BOI Report as it did after the 5th Circuit Court of Appeals temporarily stayed the injunction. Incorporated associations without an exemption, however, should have the information it needs ready to file a BOI Report in the event that the U.S. Supreme Court rules in the government’s favor.

January 3, 2025 Update: Justice Alito has ordered that the Plaintiffs have until 4:00 pm on January 10, 2025 to file a response to FinCen’s filing seeking a stay of the injunction. Either Justice Alito or the U.S. Supreme Court could rule on FinCen’s filing sometime after the January 10, 2025 filing deadline.