Main MenuU.S. Government Appeals CTA Injunction **updated** Congress Does Not Delay BOI Reporting Deadline but Three CTA Appeals Pending
by Richard S. Ekimoto, Esq.
I recently included a short post about the Federal District Court order halting enforcement of the CTA. The Federal District Court Order granted a Nationwide injunction blocked the enforcement of the CTA reporting requirement stating that “reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”
Since my post, FinCen filed a notice of appeal to the Fifth Circuit Court of Appeals. In addition, FinCen finally posted a notice on its website addressing the injunction. FinCen stated:
While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Therefore, reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. Nevertheless, reporting companies may continue to voluntarily submit beneficial ownership information reports.
The website did not address whether FinCen will be seeking an order from the 5th Circuit Court of Appeals to stay the Federal District Court Order. If a stay of the Federal District Court Order is granted, reporting companies could again be required to file their BOI Report. As a result, incorporated associations should have the information for their BOI Reporting available so it can file if necessary. While FinCen will accept voluntary BOI Reports at this time, it probably doesn’t make sense to file unless the Federal District Court Order is stayed or overturned.
December 14, 2024 Update: FinCen has filed a motion with the Federal District Court in the Eastern District of Texas, seeking a immediate stay of the nationwide injunction of the CTA. If the stay is granted, reporting companies would be required to file their BOI report while FinCen’s appeal is heard. The Federal District Court issued an order on December 12, 2024, giving the plaintiffs until noon on Monday, December 16, 2024 to respond to FinCen’s motion. FinCen has said that they will seek a stay with the 5th Circuit Court of Appeals if the Federal District Court didn’t grant the stay by December 13, 2024. It is unclear whether FinCen will file a motion with the 5th Circuit Court of Appeals or wait until the Federal District Court considers the filing by the plaintiffs. At this point, incorporated associations should continue to monitor the situation before filing a BOI report.
December 16, 2024 Update: FinCen also filed an emergency motion in the 5th Circuit Court of Appeals to stay the Federal District Court order granting a nationwide injunction of the CTA pending appeal. The 5th Circuit has provided the plaintiffs until 5:00 pm on December 17, 2024 to respond to the Federal Government’s motion. The Federal Government will have until noon on December 19, 2024 to file a reply brief. That probably means that the Federal District Court order enjoining enforcement of the CTA will remain in effect until at least December 20, 2024. Even if a stay pending appeal is granted by the 5th Circuit, it seems likely that there would be a grace period for reporting companies to file a BOI report due to the injunction. If the 5th Circuit Court of Appeals denies the emergency motion, FinCen could seek further review by the U.S. Supreme Court. Incorporated associations should continue to monitor the situation before filing a BOI report.
December 18, 2024 Update: Yesterday, Congressional leaders unveiled a Continuing Resolution spending bill to fund the government through March 14, 2025. This bill is necessary to avoid a government shut-down on Friday, December 20, 2024. A number of provisions are included in the Continuing Resolution including a provision that would extend the CTA deadline for one year. It appears likely that the Continuing Resolution will pass by the Friday deadline. Community associations that have not filed their BOI Report should continue to hold-off of filing and monitor the situation.
December 19, 2024 Update: Yesterday, after Congressional leaders unveiled the Continuing Resolution that would have extended the deadline for filing a BOI Report to January 1, 2026, Donald Trump came out in opposition to the legislation. Donald Trump apparently did not oppose the extension of the BOI Reporting deadline, but the spending provisions and the lack of an extension of the debt ceiling. As a result, Republican legislators sought approval for a alternative Continuing Resolution to avoid a governmental shut-down that will occur after Friday, December 20, 2024 if no legislation is passed. The alternative Continuing Resolution did not include a provision to extend the BOI Reporting deadline because it was a substantially slimmed down bill. The alternative Continuing Resolution was voted down in the U.S. House of Representatives by a vote of 174-235 with one abstention. The U.S. House of Representatives have not announced its plans to avoid a governmental shutdown after tomorrow. One possibility is for the House to consider the original Continuing Resolution which includes the extension of the BOI Reporting deadline. It is unclear what impact a governmental shutdown would have on the filing and enforcement of the CTA even if the BOI Reporting requirement were in place. The nationwide injunction of the CTA remains in place, although the 5th Circuit Court of Appeals is considering a governmental request to stay the injunction pending the appeal. Community associations, particularly unincorporated associations that have not filed their BOI Report should continue to hold-off of filing and monitor the situation.
December 20, 2024 Update: The U.S. House of Representatives just passed a Continuing Resolution that will hopefully avoid a governmental shutdown by a vote of 366-34-1. The vote did not include an extension of the BOI Reporting deadline nor an extension of the debt ceiling. The bill will proceed to the U.S. Senate and if passed, will go to President Biden who indicated support for the bill. At this point, the 5th Circuit Court of Appeals has indicated that it will decide the government’s emergency motion to stay the CTA injunction pending appeal by Friday, December 27, 2024. In addition, there is a pending 11th Circuit Court of Appeal of the Alabama Federal District Court ruling that the CTA is unconstitutional. It is possible that the 11th Circuit Court of Appeals could also address the BOI Report deadline for reporting companies beyond those covered by the Alabama ruling. The 4th Circuit Court of Appeals is also considering the Community Associations Institute’s challenge to the CTA. Community associations should continue to monitor the situation. Incorporated associations that are not subject to an exemption might consider having the information it needs to file its BOI Report on hand if the injunction is lifted.
December 23, 2024 Update: 5th Circuit stayed the nationwide injunction and the CTA deadline is back on for now.
