We last visited the pending January 1, 2025, deadline to file the new Beneficial Ownership Information (“BOI”) report in my article, With Deadline Looming, FINCEN’s Beneficial Ownership Information Reporting Is A Hot Mess (Dec. 9, 2024). At that time, a U.S. District Court had issued a nationwide preliminary injunction prohibiting FINCEN from enforcing the BOI filing requirement. The article warned that the Treasury Department would be taking an appeal and that it was entirely possible that the preliminary injunction would be lifted.
And that is exactly what happened. The U.S. Fifth Circuit Court of Appeals in Texas Top Cop Shop, Inc. v. Garland, 5th Cir. Appeal No. 24-40792 (Dec. 23, 2024), has reversed the U.S. District Court and dissolved the preliminary injunction. The bottom line is that the BOI filings are still due by January 1, 2025, just as if the preliminary injunction had never been entered.
The Fifth Circuit’s opinion is very short and you can read it for yourself here. The most interesting portion of the Fifth Circuit’s opinion is the discussion that the Corporate Transparency Act, which gives rise to the FINCIN BOI requirements, is very likely a constitutional exercise of Congress’ powers under the Commerce Clause. The opinion of the U.S. District Court was highly questionable on this point as the U.S. Supreme Court has traditionally recognized that Congress has broad powers to regulate those things which have an effect on interstate commerce. Since the CTA operates to gather information to fight money laundering, the financing of terrorism, tax fraud and other crimes, it seems to be a very safe exercise of the Commerce Clause powers.
Note that there will be additional challenges to the CTA, including in this same case, on a variety of grounds including the Treasury Department’s alleged failure to abide by the Administrative Procedures Act and whether the CTA might in particular cases violate certain constitutional protections under the First and Fourth Amendments. Those challenges are for another day, however. As we sit here today, the January 1 deadline is still in full force and effect as if the preliminary injunction had never been entered.
So, if you are required to file and have not done so yet, the time is here to ― in the famous words of Daniel Lawrence Whitney a/k/a Larry the Cable Guy ― get-r-done.