Advocacy Alert: Despite SCOTUS ruling, BOI reporting freeze remains in effect
January 24, 2025
By FICPA Governmental Affairs
The Supreme Court of the United States on Thursday lifted an injunction barring enforcement of the Corporate Transparency Act, but the beneficial ownership information (BOI) reporting freeze remains in effect thanks to a separate injunction in another case.
The Financial Crimes Enforcement Network (FinCEN) released this updated guidance on Friday morning:
On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
Like Texas Top Cop Shop, Smith v. U.S. Department of the Treasury comes from the Eastern District from the Texas, where a federal judge on Jan. 7 sided with the plaintiffs and issued a nationwide injunction against the BOI reporting rule.
While Thursday’s ruling from the Supreme Court stays the injunction in Texas Top Cop Shop, it does not stay the injunction in Smith.
These developments are the latest in a two-month legal saga that has seen BOI reporting be enforced and enjoined on multiple occasions.
Texas Top Cop Shop v. McHenry is currently scheduled to be heard by the Fifth Circuit Court of Appeals on March 25. The decision in Smith v. Treasury has thus far not been appealed.