In a significant turn of events, the Fifth Circuit Court of Appeals has reinstated a nationwide injunction halting the enforcement of beneficial ownership information (BOI) reporting requirements. This decision, issued on Thursday, reverses an order by the same court from earlier last week.The court’s latest ruling cited the need to “preserve the constitutional status quo while the merits panel considers the parties' weighty substantive arguments.” This panel will ultimately decide the appeal in this ongoing legal battle.
Timeline of Recent Developments
- December 3, 2024: A federal district court in Texas issued the initial injunction in the case of Texas Top Cop Shop, Inc. v. Garland (No. 4:24-CV-478). This ruling temporarily barred the enforcement of the BOI reporting rule.
- Earlier Last Week: The Fifth Circuit Court of Appeals granted the Department of Justice’s (DOJ) motion to lift the injunction.
- Thursday, December 26, 2024: A different panel of judges within the Fifth Circuit reversed the earlier decision and reinstated the injunction.
Implications for Businesses
The shifting court rulings have created uncertainty for businesses working to meet compliance obligations under the CTA. After Monday’s brief lifting of the injunction, FinCEN announced a revised deadline of January 13, 2025, for BOI filings. As of Monday morning, FinCEN had not issued any updates on its BOI reporting guidance following the reinstatement of the injunction.The AICPA has advised small businesses with BOI filings to continue preparing necessary information while awaiting further legal clarity. We would like to further emphasize the importance of readiness should the injunction be lifted again.
What’s Next?
As the legal battle continues, we urge you to stay informed about developments in the case and FinCEN’s guidance. The Fifth Circuit’s eventual decision on the appeal will likely determine the next steps for the BOI reporting requirements and their enforcement timeline.We are closely monitoring the situation and will provide updates as new information becomes available. For assistance with BOI reporting, please reach out to us.
