By: Katherine A. Day, Esq. (kad@efclaw.com) and
Matti C. Tacy, Esq. (mct@efclaw.com)
Corporate Attorneys, Egan, Flanagan and Cohen, P.C.
The Financial Crimes Enforcement Network (“FinCEN”) continues to issue developing guidance on beneficial ownership information (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”). Coming just days after the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of the Treasury, 6:24-cv-00336 (E.D. Tex.), issued an order that reinstated BOI reporting requirements under the CTA, FinCEN announced that it will not take any enforcement action against reporting companies who fail to report by the newly extended deadline of March 21, 2025.
Under the CTA, failure to comply with reporting obligations may result in civil penalties of $500 or more for each day the violation continues, and willful failure to comply may result in criminal penalties of up to two (2) years imprisonment and fines of up to $10,000. On February 27, 2025, however, FinCEN announced that these penalties and fines will not be enforced for failure to report or update BOI by the current deadlines. Instead, any enforcement actions and the issuance of any fines or penalties will not occur until a forthcoming interim rule becomes effective and the new relative due dates have passed.
FinCEN expects to issue an interim final rule no later than March 21, 2025, to further extend BOI deadlines and reduce the regulatory burden on small businesses, while continuing to prioritize BOI reporting for entities that pose significant national security risks.
In the meantime, reporting companies should prepare their BOI reports and be ready to submit the reports, in the event they remain subject to the reporting requirements under the interim final rule.
Egan, Flanagan and Cohen’s corporate team continues to follow these ongoing developments and remains ready to assist with any CTA questions. Nothing in this legal update should be construed as legal advice. However, if you have any questions regarding the CTA or your business’s obligations, you can contact our team directly by contacting Attorney Kate Day, Esq. at kad@ecflaw.com or Attorney Matti Tacy, Esq. at mct@efclaw.com or by calling (413) 737-0260.
