Corporate Transparency Act – Legal Challenges and Compliance
The Corporate Transparency Act (CTA), aimed at combating money laundering by requiring businesses to report beneficial ownership information (BOI), is currently on hold due to ongoing legal challenges. The U.S. Court of Appeals for the Fifth Circuit temporarily blocked enforcement on December 27, 2024, with a hearing set for March 25, 2025, to determine the law’s future. Until then, businesses are not required to submit BOI reports, but that could change quickly if the law is upheld.
Initially, BOI reporting was set to begin January 1, 2025, before being delayed to January 13, 2025. Now, with court rulings putting the law in limbo, businesses face uncertainty over compliance deadlines. Despite the pause, non-compliance could lead to significant fines—up to $500 per day per violation—if reporting requirements resume. Businesses should stay informed and prepare their BOI information rather than scramble if enforcement restarts.
In her 2024 Annual Report to Congress, National Taxpayer Advocate Erin Collins flagged CTA compliance issues as a major concern, noting that many business owners are unaware of the law or how to comply. She emphasized that delays in implementation don’t remove the potential risk of penalties once enforcement begins.
With legal challenges ongoing, businesses should evaluate their reporting obligations, gather required ownership information, and monitor regulatory updates. Waiting until the last minute could result in rushed compliance efforts if the courts rule in favor of the law. If you need guidance on CTA requirements, Strategic Tax Planning is here to help you stay ahead of any developments. Contact us at (202) 455-6010 or schedule a consultation to ensure your claim is filed on time!
