A federal district court in Texas has lifted an injunction that previously blocked enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements. This decision follows a recent U.S. Supreme Court ruling that stayed a similar injunction in a separate case, effectively clearing the way for the Financial Crimes Enforcement Network (FinCEN) to move forward with enforcement.

Background on the CTA and BOI Reporting

The Corporate Transparency Act, passed as part of the National Defense Authorization Act of 2021, requires certain business entities—primarily limited liability companies (LLCs), corporations, and similar entities—to disclose personal ownership information to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The intent behind the law is to curb illicit activities, such as:

• Money laundering

• Tax fraud

• Drug trafficking

• Terrorism financing

Failure to comply with BOI reporting could result in significant penalties, including:

• Up to two years in jail

• $10,000 in fines per violation

Recent Legal Developments

While the Texas court’s decision allows the CTA to proceed, legislation is also in motion that could delay enforcement. Last week, the U.S. House of Representatives unanimously passed a bill (408-0) to postpone the BOI reporting requirement until January 1, 2026. The bill now moves to the Senate for consideration.

At the same time, FinCEN has provided updated guidance, extending the deadline for businesses to file their initial, updated, or corrected BOI reports until March 21, 2025—a 30-day extension from the prior deadline of February 19, 2025.

What Business Owners Need to Know

• Existing businesses originally required to file by January 1, 2025, now have until March 21, 2025.

• New businesses formed after January 1, 2024, are still expected to comply but may receive additional time.

• FinCEN is evaluating ways to modify reporting rules for small businesses and lower-risk entities.

• Businesses that were members of the National Small Business Association (NSBA) prior to March 1, 2024, are currently exempt due to a separate legal ruling.

Potential Congressional Action

In addition to the proposed delay, some lawmakers are seeking a full repeal of the CTA. A bill introduced by Sen. Tommy Tuberville (R-AL) and Rep. Warren Davidson (R-OH) aims to eliminate the BOI reporting requirement altogether. Meanwhile, Sen. Tim Scott (R-SC) has introduced a Senate companion bill to the House’s one-year delay proposal.

How Oakhaven Advisors Can Help

For business owners, navigating the Corporate Transparency Act’s reporting requirements can be complex. Oakhaven Advisors is closely monitoring these legal and regulatory developments to keep our clients informed. If you need guidance on whether your business is required to file a BOI report or want to discuss strategies to ensure compliance, reach out to us today.

Contact us at Oakhaven Advisors for assistance.