The Chamberlain Hrdlicka Business and International Tax Blog provides updates, developments, and insights on business and international tax.
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The legal battle over the Corporate Transparency Act (CTA) continues, now before the U.S. Supreme Court. On December 31, 2024, the U.S. Department of Justice (DOJ) filed an emergency application to stay the nationwide injunction issued by the Eastern District of Texas. This injunction currently halts enforcement of the CTA and its beneficial ownership information (BOI) reporting requirements, leaving businesses in a state of uncertainty.
The Legal Battle So Far
The CTA has been subject to a series of back-and-forth rulings:
- December 3, 2024: The Eastern District of Texas issued a ...
On December 26, 2024, the Fifth Circuit Court of Appeals vacated its December 23, 2024 stay of the preliminary injunction against the Corporate Transparency Act (CTA), reinstating the nationwide injunction issued by the Eastern District of Texas. As a result, reporting companies are once again not required to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN) while the injunction remains in effect. FinCEN has issued a statement confirming this development, and reiterating, consistent with its position prior to the ...
On December 23, 2024, the Fifth Circuit Court of Appeals granted the government’s emergency motion to lift the nationwide injunction against the Corporate Transparency Act (CTA). This decision reinstates the CTA’s reporting requirements for beneficial ownership information (BOI). In response, the Financial Crimes Enforcement Network (FinCEN) has issued new guidance, including extended filing deadlines to account for the time the injunction was in effect.
Key Update from FinCEN – Extended Filing Deadlines
- Pre-2024 Reporting Companies: Entities created or ...
With the year-end deadline looming for more than thirty million entities to file beneficial ownership information (“BOI”) reports with the Financial Crimes Enforcement Network (“FinCEN”) under the Corporate Transparency Act, 31 U.S.C. § 5336 (the “CTA”), a significant development has occurred. On December 3, 2024, a federal district court in the Eastern District of Texas issued a nationwide injunction on the CTA and its filing deadline in Top Cop Shop v. Garland et al., Case No. 4:24-cv-00478.
What Does this Ruling Say?
The CTA is preliminarily enjoined and cannot be ...
The United States District Court for the Northern District of Alabama - Northeastern Division has issued a ruling declaring the Corporate Transparency Act (CTA) unconstitutional. As a result, the federal government is permanently enjoined from enforcing the CTA against the named plaintiffs, the National Small Business United d/b/a the National Small Business Association, et al., who challenged the law.
This decision may impact the enforcement of the CTA, and brings into question whether Beneficial Ownership Information reports should be filed by companies with FINCen within ...
Starting January 1, 2024, the Corporate Transparency Act (“CTA”) may require your business entity to file a report with the Financial Crimes Enforcement Network (“FinCEN”) disclosing information about (1) the entity, (2) its Beneficial Owners (as discussed further below) and (3) for entities created or registered starting January 1, 2024, its Company Applicants (“BOI Report”). According to the government, tens of millions of entities will not qualify for an exemption and will need to start filing BOI Reports. Each entity that is registered with a U.S. state to ...
New Reporting Obligations for Privately Held Entities
Starting January 1, 2024, the Corporate Transparency Act ("CTA") may require your business entity (e.g., LLC, Corporation, LP, etc.) to file a report with the Financial Crimes Enforcement Network ("FinCEN") disclosing information about (1) the company and (2) its beneficial owners.
Please note these two key deadlines:
(1) Any existing entity (created before January 1, 2024) that does not qualify for an exemption must file a Beneficial Ownership Information Report (a “BOI Report”) no later than January 1, 2025.
(2) Any ...
On August 24, 2022, the IRS released Notice 2022-36, Penalty Relief for Certain Taxpayers Filing Returns for Taxable Years 2019 and 2020 (the “Notice”). The Notice waives certain failure-to-file penalties (FTF) and international information return (IIR) penalties for 2019 and 2020 returns. These must be filed no later than September 30, 2022. Plus, penalties for certain late-filed returns for S corporations and partnerships that failed to report required information on 2019 and 2020 returns can be abated.
The Service recently issued proposed regulations [REG-104352-18] at the end of 2018 pertaining to hybrid dividends and amounts paid or accrued in hybrid transactions or with hybrid entities. Hybrid payments, transactions and entities are often utilized in structuring relationships between domestic and foreign parties, including affiliates and related parties. The objective for employing a “hybrid” feature in many instances is to achieve a favorable tax outcome across jurisdictions. In some cases an intended double benefit in the form of a deduction/ no income outcome or a double non-taxable income outcome.
| I. | Small Businesses with a Biweekly Payroll Schedule can Elect to use an Alternative Payroll Covered Period |
SBA Form 3508, Paycheck Protection Program Loan Forgiveness Application, provides an optional alternative payroll covered period for small businesses with a biweekly (every other week) or more frequent payroll schedule. A small business may elect the alternative covered period only if it uses a biweekly or more frequent payroll schedule; those with monthly payroll schedules cannot make the election. If a small business makes the election, the eight-week period, for ...