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December 05, 2024 
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A federal district court in Texas has issued a nationwide injunction against the Corporate Transparency Act and the FINCEN BOI Report. The injunction states that the CTA and the BOI Report are unconstitutional.
DISCLAIMER:
This video is intended for education purposes and should not be taken as legal, financial or tax advice. You should consult with a professional about your unique situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. are providing educational content to help small business owners and individuals become more aware of certain issues and topics, but it cannot give blanket advice to a broad audience. Neither Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. nor its members can be held liable for any use or misuse of this content.
TRANSCRIPTION:
Hello from Freedom Group. We have breaking news for many small business owners. There’s a district federal judge in the state of Texas that has released a nationwide injunction against the Corporate Transparency Act or the CTA.
Why is this important for you as a small business owner? Included in this law, that’s where the new FINCEN BOI report requirements are stipulated. So the Corporate Transparency Act is the law that implements the FINCEN BOI report for many small businesses, which if you remember, if your business was formed in 2023 or before, your due date to file the new FINCEN BOI report was January 1st, 2025. So that’s less than a month away.
Why? We’re recording this video on December 5th, okay? If you opened up a business in 2024, you had 90 days to file the FINCEN BOI report. If you opened up a business in 2025 and forward, you had 30 days to file the FINCEN BOI report. Those were the rules and the reason for this report is that the government wanted more information about the owners.
This is their way of them saying that this report was going to help terrorism, money laundering. It would avoid scammers building shell companies to hide their identities. So the reason behind the law, it had good intentions, but many people feel this is government overreaching on our rights. So this federal judge in Texas basically made a nationwide injunction.
So this doesn’t only apply to Texas. This is nationwide, the entire U.S. where basically it’s putting a hold. It’s not canceling the law.
It’s basically on hold until further decisions are made by the courts, okay? So what happens now? Most likely, the government is going to appeal this. The Biden administration can appeal this, but here’s the thing. A month from now, we’re going to have a new president.
President Trump is going to come in with a new attorney general, with a Republican-led Congress, and most likely they’re going to have to decide what’s going to happen with this injunction. If the Corporate Transparency Act stays, if the FINCEN BOI report stays, or are they going to just cancel this law, okay? Now, most likely, I think President Trump is going to cancel this law. Why? Because usually Republicans, they don’t like more burden on small business owners, okay? And in 2020, when this law was written, President Trump was against it.
But then in 2021, President Biden was the one who signed it into law. So most likely, the new administration is going to cancel this. But according to this injunction, if you do not file the BOI report by your due date, they can’t penalize you, okay? Now, you can still file.
You can go to the FINCEN website. You can file your BOI report. It’s a very simple report to do, all right? But if you don’t, according to this injunction, you will not get penalized.
So what can happen? Let’s say next year, if President Trump decides to cancel this law, then it’s gone. You didn’t have to do it. But let’s say that they decide that they want to enforce it because they think that it’ll be good to fight terrorism and money laundering.
I doubt it, but it is a possibility. If that happens, then at that point, the government is going to say, no, we’re going to enforce the BOI. And this is your new due date.
And at that point, the government is going to give small business owners a new due date to file the BOI report if you haven’t done so. If you’ve done your BOI, great. You are following the rules, okay? But if you haven’t done it, according to this injunction, you will not get penalized, okay? So once again, this is not legal advice.
Consult with your attorney if you want to file the BOI report or not, okay? My personal opinion is that I really think President Trump is going to remove the BOI report based on what has happened in the past, but we have to wait, all right? So that’s the breaking news for many small business owners. And remember to subscribe to our channel. We will report and do a video if new developments happen on the BOI report.
And so it’s important to subscribe to our channel so you don’t get penalized for not doing a report you should have done, all right? So thank you for watching this video. I hope you have received valuable information. If you have, please like it, share it with another business owner that can take advantage of this information.
Remember that here at Freedom Group, we have been providing quality tax services, accounting services, immigration, real estate, insurance, financial planning, tax planning, so we can help you in many, many ways. You can always call us at 407-344-1012, or you can visit our website freedomgroupfl.com.
Thank you for watching and God bless. Bye-bye.
Summarization
Recent developments bring significant news for small business owners. A federal district judge in Texas has issued a nationwide injunction against the Corporate Transparency Act (CTA). This decision directly impacts the FINCEN BOI Report, a filing requirement set to become mandatory for many businesses. Initially, the deadline for filing was January 1, 2025, for companies registered before 2023. However, this ruling has temporarily halted the enforcement of the law, leaving business owners uncertain about what steps to take next.
What Is the FINCEN BOI Report?
The FINCEN BOI Report requires businesses to disclose their Beneficial Ownership Information to the Financial Crimes Enforcement Network (FINCEN), a branch of the U.S. Treasury. The report was introduced to combat money laundering, terrorism financing, and the misuse of shell companies. While its goals are laudable, critics argue it places an unnecessary burden on small businesses, leading to concerns about government overreach.
Key Deadlines and Compliance Changes
Before the injunction, businesses were required to adhere to the following filing deadlines:
- Existing Businesses: File by January 1, 2025.
- New Businesses (2024): File within 90 days of registration.
- Future Businesses (2025 and onward): File within 30 days of registration.
This injunction temporarily halts these requirements, meaning businesses are not currently obligated to file by these deadlines. Importantly, businesses that do not file during this period cannot face penalties under the court’s ruling.
Implications of the Nationwide Injunction
The Texas federal judge’s ruling does not eliminate the Corporate Transparency Act but pauses its enforcement. This nationwide injunction applies to all U.S. businesses, not just those in Texas. The federal government, under the Biden administration, is expected to appeal this decision. However, the impending change in presidential leadership raises questions about the law’s future.
With a new administration and potentially a Republican-led Congress, the Corporate Transparency Act—and by extension, the FINCEN BOI Report—could be repealed. Historically, Republican policies favor reducing regulatory burdens on small businesses, which suggests the law may face significant revisions or complete removal.
Should You File the FINCEN BOI Report Now?
Filing the FINCEN BOI Report remains optional during this injunction period. Business owners can still file through the official FINCEN website. For those who choose to file, the process is straightforward and ensures compliance in case the law is upheld. However, those who opt not to file are currently protected from penalties under the court ruling.
If the Corporate Transparency Act is repealed, businesses that did not file will face no repercussions. Conversely, if the injunction is lifted and the law is enforced, the government would likely provide a new filing deadline.
What’s Next for the FINCEN BOI Report?
The next steps depend on political developments and court rulings. If the law remains intact, business owners will need to prepare for eventual compliance. For now, the best course of action is to stay informed. FreedomTax Accounting offers regular updates on this evolving situation, ensuring clients remain compliant and avoid penalties.
Why Partner with FreedomTax Accounting?
Navigating complex regulatory changes can be daunting. FreedomTax Accounting has over 20 years of experience helping small businesses manage tax, compliance, and accounting requirements. Our team is dedicated to simplifying the process and ensuring you stay informed and prepared.
Interesting Fact
A 2022 report by the U.S. Small Business Administration found that 32.6 million small businesses could be affected by the FINCEN BOI Report, highlighting the law’s broad implications across the economy.
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Staying compliant during this period of uncertainty is crucial. For personalized guidance, reach out to FreedomTax Accounting, where we are committed to your success and peace of mind.
