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Anti-Corruption

United States: Spring brings CTA reporting deadline

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Tax news and developments February 2025

In brief

As of February 18, 2025, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) is once again authorized to enforce the beneficial owner interest (BOI) reporting provisions of the Corporate Transparency Act (CTA). Therefore, beneficial ownership interest report (BOIR) filing by Reporting Companies is once again mandatory with an extended deadline of March 21, 2025, for many companies.

In more detail

FinCEN has set an extended March 21, 2025, BOIR filing deadline for Reporting Companies with a filing due date that has passed and have not yet filed their BOIR (see FinCEN announcement at FinCEN Notice, FIN-2025-CTA1, 2/18/2025). This includes Reporting Companies that were formed prior to 2024, which had a January 1, 2025, deadline, and those formed during 2024 and 2025 which had a filing deadline during the period of the stay against enforcement.

As further background, on January 7, 2025, the US District Court for the Eastern District of Texas in Smith v. U.S. Dep’t of the Treasury issued an order staying FinCEN’s regulations implementing the BOI reporting requirements. This stay prevented FinCEN from requiring BOI reporting. On January 23, 2025, the US Supreme Court in the case of Texas Top Cop Shop, Inc. v. Bessent (formerly, Texas Top Cop Shop, Inc. v. McHenry and Texas Top Cop Shop v. Garland) granted the US government’s application to end the nationwide preliminary injunction against enforcement of the CTA issued on December 3, 2024, by a different judge from the US District Court for the Eastern District of Texas. However, the Supreme Court’s decision in Texas Top Cop was of no impact because the nationwide injunction in Smith remained in place.

On February 5, 2025, the US Department of Justice appealed the District Court’s order in Smith and requested the stay against CTA enforcement by FinCEN be lifted during the appeal. On February 18, 2025, the District Court in the Smith case agreed to lift its January 7, 2025, stay against enforcement of the CTA in light of the Supreme Court’s lifting of the stay in Texas Top Cop Shop.

Given the February 18, 2025, Smith order, FinCEN’s regulations implementing the BOI reporting requirements of the CTA are no longer stayed. Thus, BOI reporting is now mandatory, subject to the extended March 21, 2025, filing deadline noted above. The US House of Representatives voted 408-0 on February 10, 2025, in favor of extending the CTA’s reporting deadline to January 1, 2026, but the measure is still pending in the US Senate.

Please feel free to reach out if you require any assistance with your BOI filings.

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Glenn G. Fox is a partner of Baker McKenzie's Wealth Management and Tax Practice Groups in New York and a member of the firm’s Global Tax Wealth Management Steering Committee. He is a domestic and international tax, estate planning, and tax-exempt (charitable) organizations lawyer with vast experience working with closely held businesses, families and charitable organizations from the US and overseas. Glenn is a member of the American College of Trust and Estate Counsel and of the Society of Trust and Estate Practitioners and has been recognized for fourteen consecutive years (2007-2020) as a "New York Super Lawyer" by the New York Times.

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Terry Gilroy is a partner in the New York office of Baker McKenzie and a member of the Compliance and Investigations Practice Group. Prior to joining the Firm in 2018, Terry served as Americas Head of the Financial Crime Legal function at Barclays. Terry advises businesses and individuals on white collar and financial crime issues and has significant experience conducting investigations relating to compliance with the US Foreign Corrupt Practices Act (FCPA) and related bribery and corruption statutes, economic sanctions regulations as administered by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), and the Bank Secrecy Act and related anti-money laundering (AML) regulations and statutes. Terry spent six years on active duty in the United States Army as a Field Artillery officer.

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Justin Whittenburg is a partner in the Corporate and Securities Practice Group in the Houston office, having joined Baker McKenzie in 2003 as a summer associate. In the interim, Mr. Whittenburg spent four years as senior corporate and compliance counsel at a Houston-based leading global distributor of pipe, valve and fitting (PVF) products.
Mr. Whittenburg is currently a member of Baker McKenzie's North America steering committee for cross-border transactions and integrations. Prior to his life as a corporate lawyer, he was involved in project management for industrial construction projects in the petroleum and chemical industries.

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