Executive Summary
The enforcement of the Corporate Transparency Act (CTA) reporting requirements has been paused again following a Fifth Circuit Court decision granting a nationwide injunction while constitutional challenges proceed. Despite the current enforcement halt, businesses are advised to prepare their Beneficial Ownership Information (BOI), including names, birth dates, addresses, and identification details for each beneficial owner, to stay ready for potential compliance needs. Entities can also voluntarily submit BOI reports while awaiting the legal resolution. Maintaining communication with a CPA or compliance advisor is essential to stay informed on updates and act promptly if the CTA requirements are reinstated.
CTA injunction reinstated: continuing uncertainty
The nationwide injunction on the reporting requirements under the Corporate Transparency Act (CTA) has been reinstated, pausing enforcement yet again. This development follows the Fifth Circuit Court’s decision to block the Act temporarily while constitutional challenges proceed. For businesses, this legal back-and-forth highlights the uncertainty surrounding the CTA and its requirements.
If there’s one takeaway from this legal whiplash, it’s that entities should prepare their beneficial ownership information (BOI) regardless of the current enforcement pause. With the CTA’s ultimate fate unresolved, having this information ready will position businesses to adapt quickly to future developments and avoid potential compliance headaches.
What Beneficial Ownership Information (BOI) should you gather?
To prepare for potential future compliance, entities should collect the following information for each beneficial owner:
- The individual’s name as shown on legal documents.
- Their date of birth.
- A current residential or business address.
- A unique identifying number, such as a driver’s license or passport number, along with an image of the document.
Having this information on hand ensures that your entity is ready to comply with CTA reporting requirements should enforcement resume.
It’s important to note that you can still voluntarily submit beneficial ownership information reports now while the issue makes its way through the court system.
Stay prepared and informed
Given the ongoing legal developments, it’s crucial for reporting companies and beneficial owners to stay connected with their CPA or compliance advisor. Regular communication ensures you are updated with any changes to the CTA’s status and prepared to act quickly if the reporting requirements are reinstated.
Please contact our Canfield or New Castle office with any questions.
For over 100 years, Packer Thomas has served generations of business owners, families, and others with tax, auditing, accounting, and information technology services. But we didn’t last that long by standing still. We’ve evolved to meet the needs of our clients who are also facing challenging changes in their financial, tax, and information technology environments.
**Disclaimer:**
The information provided in this blog is based on current tax law as of the time of publication. However, tax laws and regulations are subject to change, and the content may not reflect the most current legal or tax developments at the time of your reference. This blog is for general informational purposes only and should not be considered as specific tax advice. We recommend consulting with your Packer Thomas professional for personalized guidance or to address any specific questions you may have.