Whiplash: The Corporate Transparency Act & What You Need to Know
The Corporate Transparency Act (CTA) reporting mandate has made another comeback – and no, it’s not the good kind of comeback like Brendan Fraser’s return to Hollywood. It’s the paperwork kind, and it’s here to remind us all that laundromats are for washing clothes - not money.
After the CTA became law in January of 2024 - federal courts have placed several injunctions on its enforcement in response to constitutional challenge. While I can’t say any of us are happy to see the lates injunction lifted - Smith v. United States Department of Treasury lifted the preliminary injunction on CTA enforcement - which was constructively the last legal roadblock preventing enforcement.
What’s the Deal?
On February 18, 2025, a courtroom showdown in the Eastern District of Texas (yes, in Smith vs. U.S. Department of Treasury) lifted the last injunction blocking CTA enforcement. Translation? The government’s back on its paperwork patrol, and CTA’s beneficial ownership reporting requirements are in full swing again. So, if you were enjoying a brief break from all those forms, well, time to rejoin the party! (Hey, at least the IRS is rolling back their long-standing policy of letting IRS agents show up on your doorstep - citing to safety concerns. They actually have to give you some notice now, in most cases anyway. (ie you won’t get a warning if they’re coming to seize your great-grandma’s silver collection)).
Deadline Drama: Mark Your Calendars
Most companies have until Friday, March 21, 2025 to file any necessary reports. (If you’ve got a special “disaster relief exemption” deadline, you’re in the VIP club and can relax a bit longer.) FinCEN lays out the process for filing your BOI reports on their website (BOI as in Beneficial Ownership Information report - not like sk8er boi report circa 2005 Avril Lavigne).
Here’s the silver lining: FinCEN (the Financial Crimes Enforcement Network, for those who love acronyms) is already cooking up plans to revise the CTA reporting requirements. Their goal? To lighten the load on low-risk entities—which, yes, includes many small businesses which are unlikely to be laundromats. Stay tuned for new developments.
FinCEN is keeping an eagle eye on all the developments and may extend deadlines further if needed (especially for companies that pose a higher national security risk—think less “small family bakery” and more “global conglomerate”). And, if there’s any news of additional deadline extensions, you’ll probably hear it before the big March 21 cut-off. Consider it a little governmental courtesy call.
Bottom Line: File It, Don’t Fumble It!
Small business owners, it’s time to roll up your sleeves and tackle those forms. Sure, the CTA might not be as exciting as launching a new product or winning an award, but trust us—nobody wants to be the punchline in a government compliance joke. FinCEN penalties are steep if your business fails to comply with CTA reporting requirements. So, get ahead of the game, mark that March 21 deadline on your calendar, and remember: a little paperwork now saves a lot of headaches later (not to mention the fines and potential criminal penalties).
Here’s to transparency, timely filings, and keeping the paperwork from piling up higher than your office snack stash!
Happy filing (and may the forms be ever in your favor)!
