Last week, a Texas federal district court preliminarily barred enforcement of the Corporate Transparency Act nationwide. This is the law obligating companies to file Beneficial Ownership Information Reports (BOIR) with FinCen, which I have frequently done on behalf of my clients this year. This federal court decision raises the question of whether, if you have not filed a BOIR yet, you should still do so.

I would definitely say it is optional at this stage and you will not be penalized if you decide not to file while this order is in effect. I have seen mixed thoughts from lawyers on this, with some advising that you should still file to avoid the risk of a penalty for not filing if the federal district court ruling is later overturned. But, all you have to do is look at FinCen's BOIR filing portal to see their clear statement at the top (see image) that says: "reporting companies are not currently required to file a BOIR and are not subject to liability if they fail to do so while the applicable order remains in force." So I think it is fair to say that there is no risk of penalty if you choose not to file until greater clarity comes from higher courts.

You might still choose to file your BOIR to avoid having to keep track of this issue (particularly whether a higher court overturns this federal district court) and/or if you have already gathered the necessary info (like photo ID of each beneficial owner of your company and your EIN). That can be a reasonable decision, particularly if you don't have too many beneficial owners. If that applies to you, here's the link to file: https://boiefiling.fincen.gov/fileboir/ But, again, it's optional if/until a higher court says otherwise.

Here is a decent article on the topic if you want more background: https://natlawreview.com/article/texas-federal-court-blocks-corporate-transparency-act-halts-nationwide-enforcement  

Happy to discuss further with anyone that has questions. Reach out via my contact form in my website here. Or my email is brooks@lightlegal.com.

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