BOI Reporting on hold, again
On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit vacated the court’s prior December 23, 2024, order that granted a stay of the preliminary injunction issued in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.) and suspended the filing deadlines for reporting companies of Beneficial Ownership Information (BOI Report) with the Financial Crimes Enforcement Network (FinCEN).
In a statement celebrating the decision, Rob Smith, a senior attorney for the National Federation of Independent Business (NFIB), said, “The court’s reinstatement of the nationwide injunction is a welcome sigh of relief for small businesses. Since being told earlier this week that they must urgently submit their BOI reports, our nation’s small businesses have experienced enormous chaos and confusion. Thankfully, the court’s latest decision recognizes that the CTA and BOI reporting requirements pose serious constitutional questions. It also provides Main Streets across the country with a reprieve from this harmful mandate while our lawsuit proceeds.”
Background
The National Law Review provided this background: On Tuesday, December 3, 2024, in Texas Top Cop Shop, the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction for the filing of BOI Reports.
On December 5, 2024, the Department of Justice (DOJ) appealed to the Fifth Circuit seeking a stay of the December 3, 2024, decision of the district court or, alternatively, seeking to narrow the injunction to cover only the named plaintiffs or the members of the named plaintiff. The DOJ had sought a similar stay from the U.S. District Court for the Eastern District of Texas, but the court denied the DOJ’s request on December 17, 2024.
Thereafter on December 23, 2024, a panel for the Fifth Circuit granted the DOJ’s motion to a stay pending appeal.
On December 26, 2024, a different panel from the Fifth Circuit issued an order that vacated the court’s prior December 23 order granting a stay of the preliminary injunction. As a result, the injunction issued in Texas Top Cop Shop remains in effect nationwide and reporting companies are currently not required to file beneficial ownership information with FinCEN.
What’s Next
Legal experts nationwide are advocating that business owners pay close attention to this ongoing matter. Many believe that the incoming Trump administration will remove this reporting requirement, or at least not pursue this case and let the District Court’s injunction stand. According to FinCEN’s website, reporting companies may continue to voluntarily submit BOI Reports but this is not required as the appeal is pending.
The case is Texas Top Cop Shop, Inc., et al. v. Garland, et al., 5th Circuit Court of Appeals, Case No. 24-40792.
