Preliminary Injunction Against BOI Reporting

For the past year we have been informing businesses of a new - BOI - filing requirement, providing general guidance of the rules and recommending businesses to reach out to their corporate attorney for assistance on same. There has been much confusion about this filing. Many small business owners had no idea of this new filing, the rules for who and what needs to be reported (at what level) are ambiguous, and the ongoing compliance to ensure the reporting is kept up to date is onerous. Not to mention the fine is steep for non-compliance.

Background

On December 3rd, The US District Court for the Eastern District of Texas issued a preliminary injunction against the enforcement of the Corporate Transparency Act, the Act that requires the BOI filings. This injunction is nationwide. The Court’s reasoning is the Act burdens businesses with significant compliance costs, oversteps constitutional boundaries, and the alleged safeguards against the misuse of collected data is unclear. While this is only a temporary injunction, it is a step toward having the government either revisit/refine the requirements or repeal the law requiring same. In my opinion, it should be repealed.

What to Do Next

So, with this injunction, what now? Do I or do I not need to file the BOI reporting by December 31, 2024? We recommend you reach out to your corporate attorney as to what should be done, as there are items to consider. For those who haven’t filed as of yet, the temporary injunction would seem to support not filing. For those that have already filed, does this injunction now stop the requirement of maintaining/updating the BOI for any changes that required reporting? Stay tuned! More to follow in the coming months as we are sure there will be activity on whether the BOI reporting will live or fade away into the sunset.

If you have any questions contact Maria T. Donohue at maria@barsongroup.com.