Janet Yellen, US Treasury Secretary, on a tour of the Financial Crimes Enforcement Network (FinCEN) in Vienna, Virginia, on January 8, 2024.
Valerie Blish/Bloomberg via Getty Images
The Treasury Department's upcoming deadline for millions of small businesses to meet new reporting requirements for “useful proprietary information” has been postponed again, following a court order suspending implementation.
The Treasury Department said the regulation, which requires small businesses to disclose the identity of people who directly or indirectly own a controlling company, is intended to prevent criminals from concealing illicit activities conducted through shell companies or opaque ownership structures.
The U.S. 5th Circuit Court of Appeals issued an order late on Dec. 26 staying the implementation while the court “considers the parties’ weighty substantive arguments” on the constitutionality of the Corporate Transparency Act, which created the Board of Inquiry’s reporting requirements, the order said.
The new deadline, which was January 13, is now unclear.
“Although it is not known how long the injunction will remain in effect, oral argument for the case has been scheduled for March 25, 2025, so we expect the injunction to be in place until at least March,” partner Daniel Stepano said. at the law firm Davis Polk & Wardwell, he wrote in an email.
Meanwhile, companies are not required to file Board of Inquiry reports with the Financial Crimes Enforcement Network, known as FinCEN, which is part of the Treasury Department.
The companies are not responsible at this time
Injury to small businesses
The delay represents a bit of a legal hit for small business owners.
On December 3, a federal court in Texas temporarily blocked the Treasury Department from enforcing the BOI reporting rules, which were then scheduled to take effect on January 1, 2025.
Then, on December 23, the Fifth Circuit Motions Committee lifted that enforcement order after an appeal from the federal government. On December 26, a different panel of the same Court of Appeal – the Merits Commission – reinstated the injunction.
“The bottom line is that no one needs to report to the Board of Inquiry — unless the injunction is lifted,” Stepano explained in an email.
