the constitutionality of the CTA. However, given that these facial challenges were just filed in late May 2024, it is unlikely that the district courts, let alone the Supreme Court, will issue decisions in time to negate the Jan. 1, 2025, filing deadlines. C. Requests for Relief by Trade Associations and Similar Organizations Over 120 trade associations have requested that Congress grant temporary relief from the CTA by suspending its enforcement and extending filing deadlines.13 The American Institute of CPAs (AICPA) similarly requested that Congress suspend enforcement and extend compliance deadlines.14 In their request, the AICPA indicates that many reporting companies mistakenly believe they are no longer required to file their BOI report due to the ruling of the District of Northern Alabama and that this may result in businesses incurring significant monetary and criminal penalties.15 Implications for Reporting Companies & Their Advisors Although there is some uncertainty surrounding the CTA, it is likely that the legislation is here to stay. Thirty countries already have similar beneficial ownership registries, including the UK, Germany, France, Italy, Japan, and Canada.16 More than 149 other countries have committed to implementing similar reporting requirements. Thus, even if courts in cases with the potential to broadly impact reporting companies, such as Texas and Massachusetts, find the CTA to be a product of legislative overreach, it is likely Congress would amend the legislation to bring it within its powers. Extensions of reporting deadlines for compliance are possible pending the Senate passing the bill contemplating such an extension, but such extensions are unlikely. Considering the significant penalties businesses could face for failing to meet compliance deadlines, such as fines up to $10,000 and two years’ imprisonment,17 advisors should ensure their clients are aware of the reporting requirements and reporting companies should be prepared to file their BOIs by their respective deadlines as the legislation currently mandates. Kaitlyn E. Mattox is a summer associate at Baird Holm LLP. Katie L. Kalkowski is an associate at the firm. Kalkowski focuses her practice on corporate transactions and general corporate matters. She counsels businesses of all sizes on a variety of matters, including entity formation, corporate governance, strategic transactions, and regulatory compliance. Hannah Fischer Frey is a partner at the firm, focusing on corporate transactions, federal and state tax planning issues, and tax-exempt matters. Fischer Frey has addressed complex partnership and corporate tax issues, including business reorganizations, private equity fund structuring, business succession planning, and tax planning in mergers and acquisitions. She has been closely involved in numerous federal and state tax examinations and audits. For more information, call (402) 344-0500 or email Kalkowski at kkalkowski@bairdholm.com or Fischer Frey at hfrey@bairdholm.com. ENDNOTES 1 Beneficial Ownership Information, Financial Crimes Enforcement Network, (2024), https://www.fincen.gov/boi. 2 See 31 U.S.C §5336(e)(2)(B). 3 31 U.S.C. §5336(b)(2). 4 Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59584 (Sept. 30, 2022). 5 Beneficial Ownership Information, G.1, Financial Crimes Enforcement Network: frequently Asked Questions, (2024), Question C.2, https://www.fincen.gov/ boi-faqs#C_2. 6 Protect Small Business and Prevent Illicit Financial Activity Act, H.R. 5119 118th Cong. (2024). 7 Actions - H.R. 5119 - 118th Congress (2023-2024): Protect Small Business and Prevent Illicit Financial Activity Act, H.R. 5119, 118th Cong. (2023), https://www.congress.gov/bill/118th-congress/house-bill/5119/ all-actions?overview=closed#tabs. 8 Repealing Big Brother Overreach Act, H.R. 8147 118th Cong. (2024); Repealing Big Brother Overreach Act, S. 4297 118th Cong. (2024). 9 Complaint at 6, Nat’l Small Bus. United v. Yellen No. 5:22-CV-1448-LCB (N.D. Ala. Mar. 1, 2024). 10 Nat’l Small Bus. United v. Yellen, No. 5:22-CV-1448-LCB, 2024 WL 899372, at *18-19 (N.D. Ala. March 1, 2024). 11 Notice Regarding National Small Business United v. Yellen, NO. 5:22-cv-01448 (N.D. Ala.), Financial Crimes Enforcement Network (March 4, 2024), https://www.fincen.gov/news/news-releases/updated-notice-regarding-natio nal-small-business-united-v-yellen-no-522-cv-01448. 12 Complaint at 2, Black Economic Council of Massachusetts v. Yellen, No. 1:24-cv-11411 (D. Mass May 29, 2024) https://lawyersforcivilrights.org/ wp-content/uploads/2024/05/BECMA-Complaint-Filed-May-29-2024.pdf; Lawsuit Challenges the Corporate Transparency Act, NFIB (May 28,2024) Lawsuit Challenges the Corporate Transparency Act. 13 CTA Coalition Letter, (March 19, 2024) https://s-corp.org/wp-content/ uploads/2024/03/CTA-Coalition-Letter-March-2024.pdf. 14 AICPA letter, (April 3, 2024) https://www.cpa.com/sites/cpa/ files/2024-04/2024_FinCEN_BOI_Delay_Enforcement_AICPA_State_CPA_ Societies.pdf; AICPA letter, “Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies Created or Registered in 2024 (Docket Number FINCEN-2023-0014; OMB Control Number 1506-0076),” (October 30, 2023) https://us.aicpa.org/content/dam/aicpa/advocacy/tax/ downloadabledocuments/2023/boi-comments-on-proposed-90-day-extens ion-final.pdf. 15 AICPA letter, (April 3, 2024) https://www.cpa.com/sites/cpa/ files/2024-04/2024_FinCEN_BOI_Delay_Enforcement_AICPA_State_CPA_ Societies.pdf. 16 Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59499 (Sept. 30, 2022); Snapshot of Beneficial Ownership registries in G7 Countries, Athennian (March 2024) https://www.athennian.com/post/snap shot-of-beneficial-ownership-registries-in-g7-countries. 17 Beneficial Ownership Information, Financial Crimes Enforcement Network: frequently Asked Questions, (2024), Question K.2, https://www.fincen.gov/ boi-faqs#K_2. CONTINUED FROM PAGE 19 20 Nebraska CPA
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