U.S. DOJ Seeks to Lift BOI Reporting Injunction

Update: On February 5, 2025, the U.S. DOJ filed a notice of appeal to the order granting the preliminary injunction issued by the district court in Smith v. U.S. Department of Treasury. The DOJ concurrently filed a motion to lift the stay in the case, pending resolution of the appeal. In its filing, the DOJ suggested the new administration's approach to enforcing this law:

If the stay is granted, the Department of the Treasury’s Financial Crimes Enforcement
Network (FinCEN) intends to extend the Corporate Transparency Act (CTA) compliance deadline
for thirty days. During that period, FinCEN will assess whether it is appropriate to modify the CTA’s
reporting requirements to alleviate the burden on low-risk entities while prioritizing enforcement to
address the most significant risks to U.S. national security. Staying the grant of preliminary relief will
help facilitate that process.

FinCEN has also posted an update on its website:

On January 7, 2025, in the case of Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas, Tyler Division, issued an order enjoining the government from enforcing the CTA against the plaintiffs and staying FinCEN’s regulations implementing the CTA’s reporting requirements (31 C.F.R. § 1010.380). On February 5, 2025, the Department of Justice—on behalf of the Department of the Treasury (Treasury)—filed a notice of appeal of the district court’s order and, in parallel, has sought to stay that order as the appeal proceeds.

If the district court’s order is stayed, thereby allowing FinCEN’s Reporting Rule to come back into effect, FinCEN intends to extend the reporting deadline for all reporting companies 30 days from the date the stay is granted. Further, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, FinCEN, during that 30-day period, will assess its options to modify further deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses, while prioritizing reporting for those entities that pose the most significant national security risks.

Update: As of January 24, BOI reporting remains voluntary. Although the U.S. Supreme Court lifted the injunction in the case before it (Texas Top Cop Shop), the January 7 injunction from Smith v. U.S. Department of Treasury remains in place.

On January 24, 2025, FinCEN posted this notice to its website.

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.

The Department of Justice has not challenged the Smith injunction. 

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On January 23, 2025, the application for stay presented to Justice Alito and by him referred to the Court was granted.

Specifically, the Court stated that the December 5, 2024 amended order of the United States District Court for the Eastern District of Texas, case No. 4:24–cv–478, is stayed pending the disposition of the appeal in the United States Court of Appeals for the Fifth Circuit and disposition of a petition for a writ of certiorari, if such a writ is timely sought.Should certiorari be denied, this stay shall terminate automatically. In the event certiorari is granted, the stay shall terminate upon the sending down of the judgment of this Court. Justice Gorsuch concurred in the grant of stay.  Justice Jackson dissented.

We are watching for guidance from FinCEN in light of this development. A different injunction from another court in the Eastern District of Texas appears to remain in effect.