Business and Financial

Today is the day! March 21, 2025, serves as the deadline for most businesses to report their beneficial ownership information (“BOI”) under the Corporate Transparency Act (“CTA”). But not so fast! While the prior statement is technically accurate, the situation has been complicated by statements and assurances from the U.S. Department of Treasury and the Financial Crimes Enforcement Network (“FinCEN”). Here’s why.

March 21 Deadline
Over the past few months, we have closely followed and analyzed the ongoing developments surrounding the CTA in our blog posts. This ever-evolving saga has included nationwide injunctions and stays—both imposed and lifted—as well as multiple extensions of the BOI reporting deadline. You can review our previous posts here:

• Corporate Transparency Act reporting deadline remains January 1, 2025
• Federal court puts Corporate Transparency Act ownership reporting on hold
• Federal Appeals Court Reinstates Corporate Transparency Act Reporting Requirements
• Corporate Transparency Act Reporting Requirements Suspended Once Again . . . For Now
• SCOTUS to Decide Fate of Nationwide Injunction Against Corporate Transparency Act
• SCOTUS Allows Corporate Transparency Act Reporting Requirements to Resume
• Corporate Transparency Act Whiplash: Reporting Requirements Still on Hold
• BOI is Back!

In short, after navigating multiple legal challenges, the original BOI reporting deadline for most businesses of January 1, 2025, was extended to March 21, 2025. However, despite this official deadline, statements and assurances from FinCEN and the U.S. Department of Treasury have added further complexity to the situation.

Promises made, promises kept?
On February 27, FinCEN announced that it would not impose fines, penalties, or any other enforcement actions against companies that fail to file or update their BOI reports by the March 21 deadline. FinCEN clarified that this “non-enforcement action” will remain in effect until a forthcoming final rule takes effect. As of this publication, FinCEN has yet to release the proposed final rule that is expected to provide further guidance and clarity on the CTA’s reporting requirements.

But the assurances didn’t stop there. On March 2, the U.S. Department of Treasury announced that the “non-enforcement action” would continue for all domestic reporting companies and beneficial owners even after FinCEN’s forthcoming rule is issued and takes effect. In essence, the Treasury has committed to not enforcing the CTA against domestic companies and owners required to file BOI reports under the Act. However, this relief will not extend to foreign reporting companies, which will be required to comply with the CTA’s reporting requirements. Additionally, the Treasury has pledged to propose a rule that would formally limit the CTA’s scope to foreign reporting companies only.

It’s important to recognize that, until these proposed rules are officially enacted, the promises made remain just that—promises. As of now, no formal rule or regulation prevents the enforcement of the CTA against domestic companies and owners. Until these assurances are solidified into law, businesses should consult with their legal counsel to determine the best course of action regarding CTA compliance. 

Additionally, there has been considerable discussion suggesting that these promises and proposed rules effectively eliminate the CTA for domestic companies and owners. However, that is not entirely accurate. If implemented, these proposed rules would be administrative in nature and remain in effect only as long as the current administration permits. As with any administration change, a future administration could introduce new rules that reinstate all aspects of the CTA, including reporting requirements for domestic companies and owners. 

For some "light" reading, feel free to check out our blog post on the Principles of Government, where we discuss federal agencies and the powers granted to them. 

On the horizon.

Legal Challenges of CTA. The CTA continues to face several legal challenges nationwide questioning its constitutionality. Two of the most notable cases, which introduced the nationwide injunction and stay, are the Texas Top Cop Shop case and the Smith case, both currently before the federal district court in Texas. These cases challenge the constitutionality of the CTA, and the court's ruling could have significant implications for the future of the law. The situation is further complicated by a division among courts across the country regarding the CTA’s constitutionality. While some courts have upheld the CTA as constitutional, others have found it likely unconstitutional and issued more limited injunctions against its enforcement. In summary, the outcome remains uncertain. It appears that this issue is ultimately headed to the Supreme Court of the United States for final determination. 

Legislation. There are several legislative proposals that could impact the CTA. One such proposal, the Protect Small Businesses from Excessive Paperwork Act of 2025, aims to extend the BOI filing deadline for most businesses to January 1, 2026. The bill has already passed the House of Representatives and is now in the Senate, where it has been referred to the Committee on Banking, Housing, and Urban Affairs. Additionally, there are bills in both the House and Senate seeking to repeal the CTA entirely. H.R. 425 and S.100, both titled the Repealing Big Brother Overreach Act, aim to fully overturn the CTA, though they have not seen significant progress since their introduction.

Legal Challenges of Promises Made. To further complicate matters, the Treasury Department’s current stance on suspending enforcement of the CTA against domestic reporting companies and owners may face its own set of legal challenges. Given the significance of the CTA, it is likely that the "non-enforcement action" will undergo intense scrutiny, litigation, and could potentially lead to legislative action. Should this occur, it raises the possibility that the CTA could remain fully enforceable, with reporting requirements for domestic companies and owners intact. This ongoing uncertainty underscores the need for businesses to stay informed and proactive about potential changes and developments.

What Should Businesses Do Now? 
With enforcement actions in limbo, businesses should: 

1. Stay informed. Due to the ongoing legal challenges, proposed legislation, and potential future legal disputes, businesses should stay up-to-date on the status of the CTA and its enforcement. The situation appears to be evolving almost daily.
2. Counsel. Businesses should consult with their legal counsel to determine the best course of action regarding the CTA. Taking a risk-averse approach may provide peace of mind, while a wait-and-see strategy could lead to unforeseen consequences.

Conclusion
At this moment, it appears that no fines or penalties will be imposed on businesses that fail to meet the March 21 deadline for BOI reporting. However, given the unpredictable nature of BOI and the CTA, things can change quickly. The CTA has been a dramatic journey, filled with unexpected twists, cliffhangers, and surprising developments. However, the story is far from over. We will continue to keep you updated on the latest changes and progress of the CTA until we reach a final resolution.

Yes, you read that right—the Beneficial Ownership Information (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”) are once again in effect. On February 17, 2025, a federal judge lifted the stay he had issued on January 7 in Smith v. U.S. Department of Treasury, which had temporarily halted the Government from enforcing BOI reporting requirements nationwide. This recent ruling eliminates all nationwide barriers that had been hindering the enforcement of the CTA. As a result, millions of businesses must now comply with BOI reporting requirements or face the risk of civil and/or criminal penalties.

Updated Deadlines
On February 18, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a notice outlining the following key updates: 

1. Most reporting companies, unless subject to a later deadline (such as disaster relief extensions), now have until March 21, 2025, to submit their initial, updated, or corrected BOI report to FinCEN.  
2. If FinCEN determines that additional time is needed for compliance, it will issue another notice before the March 21, 2025, deadline with any further changes.  
3. The named plaintiffs in National Small Business United v. Yellen are still not required to report their BOI to FinCEN at this time.

A Quick Recap: What is the Corporate Transparency Act? 
Enacted in 2021, the CTA is a federal law designed to combat financial crimes like money laundering, tax evasion, and fraud by enhancing business ownership transparency. It mandates that certain domestic and foreign entities disclose their beneficial owners—individuals who ultimately own or control the company—to FinCEN.

Who Must File Beneficial Ownership Information?
Entities designated as “reporting companies” must submit their BOI to FinCEN by March 21. This includes corporations, limited liability companies (“LLCs”), and similar entities registered with their state’s Secretary of State or an equivalent authority to conduct business. However, certain entities are exempt from BOI reporting requirements, including:  

1. Publicly traded companies which are already subject to SEC reporting requirements.  
2. Large operating companies that meet specific employee and revenue thresholds.
3. Certain regulated entities, such as banks and credit unions.

What Information Must be Filed
When completing the BOI Report, two sets of information must be submitted to FinCEN. First, the "reporting company" must provide details about itself. Then, the company must submit information about its beneficial owners.

Reporting companies will need to provide the following information: 

1. The reporting company’s legal name;
2. Tax identification number;
3. Jurisdiction of formation; and 
4. Current U.S. address. 

For their beneficial owners, reporting companies will need the following information: 

1. Full legal name;
2. Residential address;
3. A form of identification, which must be either a state issued driver’s license, a state/local/tribe-issued ID, a U.S. passport, or a foreign passport; and 
4. An image of the identification used in number 3 above. 

See our law bulletin for more details on reporting requirements. 

Where Can I File a BOI Report? 
Businesses can complete all BOI reporting by visiting the FinCEN website. There is no cost to file a BOI report. However, if a business engages a tax professional, attorney, or other third party to file a BOI report on its behalf, the business will be responsible for covering any professional fees associated with the preparation and submission of the report. 

Penalties. 
Noncompliance with the CTA and its BOI reporting requirements can result in substantial civil and/or criminal penalties, including:  

1. A daily fine of $591 (adjusted for inflation) for each day the violation persists.  
2. A criminal fine of up to $10,000 and/or up to 2 years of imprisonment.  

Looking Ahead: Ongoing Legal Challenges.
While current court rulings permit the CTA to proceed with its BOI reporting requirements, the legal battles are far from over. Several cases challenging the constitutionality of the CTA are still ongoing. Additionally, proposed legislation in both the House and Senate aims to repeal the CTA. H.R.425 and S.100, both titled the Repealing Big Brother Overreach Act, seek to fully overturn the CTA but have not yet made it through committee.

There has also been some movement on some recently proposed legislation that aims to extend the reporting deadlines under the CTA. The Protect Small Businesses from Excessive Paperwork Act of 2025 seeks to push the BOI filing deadline for most businesses to January 1, 2026. The bill has already passed the House of Representatives and has been introduced in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs.

What Businesses Should Do Now.
With BOI reporting obligations reinstated, business should take immediate steps to comply: 

1. Determine if You Must Report. You can review our law bulletin or FinCEN’s website and resources to confirm whether your company qualifies as a “reporting company.” 
2. Identify Beneficial Owners. Gather the necessary information on individuals who own at least 25% of the company or exert substantial control over the company. 
3. Timely File Reports to Avoid Penalties. Submit BOI reports electronically via FinCEN’s secure filing system. 
4. Monitor Ongoing Legal Developments. Given ongoing legal challenges, businesses should stay informed about potential changes to the CTA’s enforcement. 

Final Thoughts
The Corporate Transparency Act is here to stay—at least for now. The federal government's ongoing efforts to enforce the CTA and its BOI reporting requirements highlight its commitment to corporate transparency and anti-money laundering initiatives. Companies should ensure they comply with their obligations to avoid costly penalties while staying alert to potential future legal changes.

This article marks the beginning of a new series, Principles of Government, where we explore key legal concepts shaping public discourse. Our goal is to provide a clear, unbiased, and nonpolitical explanation of these issues, allowing readers to form their own opinions on the social, political, and economic impacts. As new developments arise, we will continue expanding this series to keep you informed.

Tariffs have been a widely discussed issue recently, particularly as President Trump considers implementing new or increased tariffs on imported goods. More broadly, tariffs have played a central role in U.S. trade policy for centuries, shaping economic growth, international relations, and domestic industries. While they are often used to protect American businesses from foreign competition, tariffs can also lead to higher prices for consumers and retaliatory measures from other countries.

Agriculture, in particular, has long been sensitive to tariffs. Farmers and agribusinesses rely on imported equipment, fertilizers, and other inputs, meaning tariffs can raise production costs. At the same time, American agricultural products exported abroad can be subject to retaliatory tariffs, making them more expensive and less competitive in foreign markets. Understanding how tariffs work, who pays them, and the legal authority behind their implementation is crucial for assessing their broader economic and political impact. In this article, we will break down the fundamentals of tariffs, their role in U.S. trade policy, and the source of authority to impose tariffs.

What Is a Tariff?

A tariff is a tax or duty imposed by a government on imported goods. Tariffs serve several purposes, including generating revenue for the government, protecting domestic industries from foreign competition, and sometimes serving as a tool in international trade negotiations. When a country imposes tariffs, it raises the cost of imported goods, making domestically produced alternatives more competitive. Tariffs are typically applied as a percentage of the value of the imported goods but can be a fixed amount per unit of goods.

Who Pays the Tax on a U.S. Tariff?

When the U.S. imposes a tariff on imported goods, the tax is paid by the importer of record, typically a U.S. company or individual bringing the goods into the country. The foreign exporter does not pay the tariff directly. Instead, the importer must pay the tariff before the goods clear customs.  To offset this cost, the importer may either pass it on to consumers through higher prices or absorb it, reducing their profit margin.

Where Does the Tax Go?

The tariff revenue collected by U.S. Customs and Border Protection is deposited into the U.S. Treasury's general fund. This money is not earmarked for a specific program but becomes part of the government’s overall revenue, which can be used for federal spending, such as infrastructure, defense, or social programs.

Example

U.S. Flour Co. purchases wheat from Canada Wheat Co. for $1 million. The U.S. government imposes a 25% tariff on all Canadian wheat imports. As a result, U.S. Flour Co. must pay an additional $250,000 in tariff duties to U.S. Customs and Border Protection before the wheat can clear customs. This increases the total cost of the imported wheat to $1.25 million, which U.S. Flour Co. may either absorb or pass on to consumers through higher prices.

What is the Purpose of Tariffs?

The U.S. imposes tariffs for several key reasons, each serving different economic, political, and strategic objectives. These include:

1. Protecting Domestic Industries

Tariffs make imported goods more expensive, helping domestic producers compete with foreign competitors. This protection is particularly useful in industries where lower-cost imports might otherwise drive U.S. companies out of business.

2. Generating Government Revenue

Historically, tariffs were a primary source of federal revenue before the income tax was established. While less significant today, tariff revenues still contribute to the U.S. Treasury’s general fund and help finance government operations.

3. Addressing Trade Imbalances

By making imports more expensive, tariffs can reduce reliance on foreign goods and encourage domestic production. This can help address trade deficits by limiting the amount of money flowing out of the U.S. to pay for imports.

4. Retaliating Against Unfair Trade Practices

Tariffs are often used as a tool to respond to unfair trade practices, such as subsidies, dumping (selling goods below market value), or intellectual property theft by foreign nations.

5. Protecting National Security

Certain tariffs are imposed to safeguard industries critical to national security, such as steel, aluminum, and semiconductor manufacturing.

6. Strengthening Foreign Policy and Diplomacy

Tariffs can be used as a foreign policy tool to pressure other countries into trade negotiations or compliance with international agreements. They can also serve as leverage in broader geopolitical strategies.

What is the Legal Authority to Impose Tariffs?

The power to impose tariffs in the United States originates from the U.S. Constitution. Specifically, Article I, Section 8, Clause 1 grants Congress the authority "to lay and collect Taxes, Duties, Imposts and Excises." Additionally, Clause 3 of the same section, known as the Commerce Clause, gives Congress the power to "regulate Commerce with foreign Nations."

While Congress has the constitutional authority to impose tariffs, it has delegated much of this power to the executive branch through legislation. Several key laws provide the legal foundation for U.S. tariff policy:

• The Tariff Act of 1930 (Smoot-Hawley Tariff Act) – This law, originally designed to protect American industries during the Great Depression, set high tariff rates on many imported goods. Although many of its tariffs have been reduced over time, the law remains a foundation for U.S. trade policy.
• Section 232 of the Trade Expansion Act of 1962 – This law allows the President to impose tariffs on imports that threaten national security.
• The Trade Act of 1974 – This legislation provides the President with the ability to negotiate trade agreements and adjust tariffs, particularly in cases involving unfair trade practices by foreign nations.

So, while the authority to impose tariffs is exclusive to Congress in the Constitution, Congress has ceded at least some of its power to the President.  

Conclusion

Tariffs play a significant role in U.S. trade policy, serving as tools for economic protection, revenue generation, and international diplomacy. While they can shield domestic industries and address unfair trade practices, they also have broader consequences, such as higher consumer prices and potential trade disputes. Understanding the legal framework behind tariffs helps clarify how and why they are implemented.

As we continue our Principles of Government series, we will explore more fundamental legal concepts that shape national and global policy, providing you with the knowledge to assess their impacts for yourself.

Originally, I reported that beneficial ownership information ("BOI") reporting requirements under the Corporate Transparency Act ("CTA") were back in effect after the SCOTUS decision in the Texas Top Cop Shop case. However, that was not the full story.

A recap of the Texas Top Cop Shop case. 
In the Texas Top Cop Shop case, a US District Court for the Eastern District of Texas issued a nationwide injunction against the enforcement of the CTA and its beneficial ownership BOI reporting requirements. However, the Government appealed that decision, and a motions panel of the Fifth Circuit Court stayed the injunction, essentially reinstating the reporting requirements of the CTA. Then, three days later, a merits panel of the Fifth Circuit reversed course and vacated the stay, effectively reinstating the nationwide injunction. The Government then applied to the Supreme Court of the United States (“SCOTUS”) for a stay of the nationwide injunction. SCOTUS did grant the Government’s application for a stay and has lifted the nationwide injunction against the CTA. However, the story does not end there. 

The CTA saga continues. 
Earlier this month, the saga that is the CTA took another turn when a US District Court for the Eastern District of Texas issued a nationwide stay on the CTA’s Reporting Requirements in a case separate from Texas Top Cop Shop. In Smith v. U.S. Department of Treasury, the court exercised its authority under 5 U.S.C. § 705 and stayed the effective date of the Reporting Rule of the CTA while the lawsuit remains pending. As a result, while there is no nationwide injunction preventing enforcement of the CTA, the Reporting Rule's implementation is still temporarily on hold thanks to the stay in the Smith case.

What is the difference between a stay and an injunction?
Stays and injunctions are similar in that both can effectively prevent certain actions before their legality is fully resolved. However, they achieve this outcome in distinct ways. An injunction is directed at a specific party, with the court ordering them to either take or refrain from taking specific actions. While a stay can be considered a "type of injunction," it operates differently. A stay does not directly target a party’s actions; instead, it temporarily suspends the authority that allows the action, without directly dictating anyone’s behavior.

While both an injunction and a stay effectively achieve the same goal, there are important distinctions between them. For instance, obtaining an injunction against a party is generally more challenging than securing a stay while a lawsuit is ongoing. This is because an injunction requires the court to actively direct a party's actions, whereas a stay simply preserves the status quo until the case is resolved.

Where are we now?
The Government has yet to appeal the issuance of the stay in the Smith case, but the window for filing an appeal has not yet closed. It will be interesting to see how the Fifth Circuit and/or SCOTUS handles the nationwide stay as opposed to the nationwide injunction. 

In summary, the latest chapter of the CTA saga confirms that businesses nationwide are not required to file BOI reports. However, businesses are still permitted to voluntarily submit their BOI reports to the US Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). 

Several lawsuits challenging the constitutionality of the CTA remain pending across the country, along with reintroduced legislation aiming to repeal the CTA entirely. It’s clear that the CTA story is far from over, and we will continue to keep you informed on the latest developments.