Ongoing legal challenges, potential amendments, and the possibility of the repeal of the Corporate Transparency Act (CTA) have thrown obligations under the CTA in flux.  FinCen has confirmed that reporting companies are not currently required to file beneficial ownership information (BOI) reports, but they can continue to voluntarily submit BOI reports.

         This recent development follows an eventful December 2024 for the CTA:

• December 3 – The U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order in Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.) granting a nationwide preliminary injunction.
• December 5 – The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal and separately sought of stay of the injunction pending that appeal.
• December 23 – A panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the Texas district court’s preliminary injunction, pending the outcome of Treasury’s ongoing appeal of the district court’s order.
• December 26 – A different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the December 23, 2024 order granting a stay of the preliminary injunction.
• December 31 – The Department of Justice sought a stay of the injunction pending the ongoing appeal from the Supreme Court of the United States.

As noted above, the Texas Top Cop Shop, Inc. injunction remains in effect, and FinCEN has stated that it is complying with (and will continue to comply with) the district court’s order as long as it remains in effect. Again, reporting companies are currently not required to file BOI reports.

So, where does leave practitioners?  Reporting obligations can change quickly, even in a matter of days, so be sure to stay abreast of any developments. For example, after the December 23, 2024 stay was granted, the January 1, 2025 filing deadline related to entities created before January 1, 2024 was only extended to January 13, 2025. Should reporting be required, note that entities created after January 1, 2025 must file their BOI reports within thirty days of creation.  You may consider collecting the required information from your clients now so you can timely file their report if and when a limited extension is approved.

Remember – by counseling your clients concerning their duty to file a BOI or by preparing the report yourself, you are providing legal advice or services for which a potential malpractice claim could be filed. However, rest assured that your AttPro policy does not contain a specific exclusion for coverage for a negligent act, error, or omission by an insured for providing legal services related to the Corporate Transparency Act. Of course, coverage for any claim depends on the facts and circumstances of the claim and the terms and conditions of the individual policy.  Click here for FAQs about the Corporate Transparency Act.