CTA-BOI Registration: On again (JK-Off Again)

The registration requirement under the Corporate Transparency Act is back on.  After the US District Court in Texas issued an injunction on December 5, staying the registration requirement, the Federal Court of Appeals lifted that injunction on December 23.

What does this mean?  Registration is required of all for-profit entities with less than $5M in gross receipts (annually) or fewer than 20 employees.  Nonprofits, larger entities, and CPA firms (but not law firms…) are exempt from this requirement.

Most CPA firms and some law firms are providing registration services (for a fee).  My firm is one of those, and we have included registration for all new entities that we form on behalf of clients.

Personally, this requirement seems like overreach and using a sledgehammer on a tack – that is, it requires ALL for-profit entities to register in the hope of intercepting the financial crimes of a very small percentage – who is likely to find a workaround (or simply not register).  This information is available through other federal and state resources, but the Treasury Department doesn’t want to go through the research or subpoenas.

The late filing fees are also severe – a daily fine of $591.00 (indexed for inflation from $500), with criminal penalities for false reporting or willful neglect.  While I agree that there has been substantial publicity about this requirement, a lot of my small business clients are completely unaware that it applies to them – and they will be the most harmed by a penalty.

There is a small grace period of 13 days (to January 13, 2025) granted by the BOI office – consistent with the time between the earlier injunction ordered by the Texas Court and the removal of the injunction by the Court of Appeals, with similar concessions applied to entities filed after September 1.

IF you own or are contemplating a new entity, be sure you put the link below on your “to do” list:

BOI Reporting

Good luck.

This just in (December 23) – The Fifth Circuit vacated its order overruling the injunction.  So… Registration requirement is suspended (again) as of this date.  Stay tuned.