Earlier today we reported that the Injunction in the “Top Shop” case (which the Government had appealed to the Supreme Court) had been overturned by the court. We expected FinCEN to reinstate the filing deadlines today.
We had been ignoring a parallel case, Samantha Smith and Robert Smith v. U.S. Department of the Treasury et. al. (U.S. District Court, E.D. Texas), which the Government had not appealed. The court in the Smith case also had deemed the CTA to be unconstitutional and also issued an injunction against enforcement of the CTA against the plaintiffs. However, we had interpreted the concurrent temporary stay of the “Reporting Rule” (requiring the filing of Beneficial Ownership Information by companies) granted by the District Court in the case, to apply only to the plaintiffs in that case as well. See the full case HERE.
Apparently FinCEN disagrees. This morning, FinCEN stated:
“On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.” [Emphasis added.]
As a result, compliance with the Reporting Rules in the CTA remains voluntary. We still recommend that at a minimum, companies send their reporting information to any third party filing agents whom they have retained. That way, if the Smith injunction is similarly overturned, you will be ready to make the necessary filing. But as of today, we are countermanding our instructions from yesterday’s report. Compliance with the Reporting Rules in the CTA remains voluntary.
In our last episode, the Fifth Circuit Appeals Court had reinstated the nationwide injunction against enforcement of the CTA pending the court’s consideration of the merits of the Government’s appeal of the injunction initially granted by the District Court. The Government filed an emergency motion with the Supreme Court to lift the stay.
On January 23, 2025, the Supreme Court granted the Government’s motion, lifting the injunction until the Fifth Circuit has ruled on the Government’s appeal and the Supreme Court has either granted or denied a “writ of certiorari” (motion for a further appeal) by the losing party. The Court’s decision appears HERE. The appeal process could take several months.
This means that the Beneficial Ownership Information reporting requirements of the Corporate Transparency Act are reinstated for the foreseeable future. We expect FinCEN to set a new, short filing deadline very soon. We will advise you when it is announced.
As detailed in our E-blasts from [August 2024] [October 2024], companies that wish to file independently can do so by going to https://boiefiling.fincen.gov/. Individuals who wish to obtain a personal identification number if they need to make multiple filings can do so by going to FinCEN’s step-by-step instructions for filing HERE. Your managing agent and other third-party companies may also offer their services for filing for a fee. Companies that wish to use our firm’s services to file may contact Vanessa Martinez [vmartinez@sbjlaw.com] to compile and submit their filings.
Thank you for staying connected with us. As we wrap up the week, we hope you have a wonderful weekend ahead. Stay warm, and please don’t hesitate to reach out if you have any questions or need further assistance.
To All Board Members and Property Managers,
If you need to fulfill your mandatory Fair Housing training requirements under Westchester County law, please register for free by clicking the link below:
CLICK HERE to register for Fair Housing training on Tuesday, March 4th, 2025, at 6:00 pm.
Eric will cover important topics such as:
- Introduction to Fair Housing Laws
- Housing Discrimination
- Emotional Support Animals
- Reasonable Accommodations
- Purchase Application Disclosures
- Complaints and Lawsuits
- Fiduciary Duties
- Q&A, and much more …
To attend a remote training session, you must pre-register by clicking on one of the above links and providing your full name. Plan to attend approximately 2 hours of online training using the Zoom webinar platform to obtain your certificate of completion. Course materials will be made available upon completion of your attendance. Non-Westchester County residents check your local jurisdiction’s training requirements.
We look forward to seeing you soon.
Please reach out to info@sbjlaw.com if you have additional questions!
To All Board Members and Property Managers,
If you need to fulfill your mandatory Fair Housing training requirements under Westchester County law, please register for free by clicking the link below:
CLICK HERE to register for Fair Housing training on Thursday, January 16th, 2025, at 6:00 pm.
Eric will cover important topics such as:
- Introduction to Fair Housing Laws
- Housing Discrimination
- Emotional Support Animals
- Reasonable Accommodations
- Purchase Application Disclosures
- Complaints and Lawsuits
- Fiduciary Duties
- Q&A, and much more …
To attend a remote training session, you must pre-register by clicking on one of the above links and providing your full name. Plan to attend approximately 2 hours of online training using the Zoom webinar platform to obtain your certificate of completion. Course materials will be made available upon completion of your attendance. Non-Westchester County residents check your local jurisdiction’s training requirements.
We look forward to seeing you soon.
Beginning January 1, 2025, New York employers must provide employees with 20 hours of paid leave annually for prenatal care appointments or other pregnancy-related needs. The key provisions of the new law are as follows:
- Every employer, regardless of the number of employees, is required to provide this benefit.
- Leave can be used for healthcare services received by an employee during or related to their pregnancy, including physical examinations, medical procedures, monitoring and testing, and consultations with a healthcare provider.
- Leave may be taken in hourly increments, and benefits must be paid in hourly installments.
- Employees will be compensated at their regular rate of pay or the applicable minimum wage, whichever is greater.
- Employers are not required to pay employees for unused paid prenatal leave upon an employee’s termination, resignation, retirement, or other separation from employment.
- Employees are entitled to the full 20 hours of leave immediately, regardless of their length of employment, and are not required to accrue leave hours to access this benefit.
Employers should update their policies accordingly and notify employees of the new law.
On December 23rd, the Fifth Circuit granted the Government’s motion to stay the enforcement of the injunction against the enforcement of the Beneficial Ownership Information reporting requirements of the Corporate Transparency Act (the “Reporting Rule”). FinCEN then extended the reporting deadline to January 13, 2025.
Yesterday, on December 26th, the Fifth Circuit reinstated the injunction against enforcement of the Reporting Rule pending a hearing on the merits of the case. The Fifth Circuit reinstated the stay “in order to maintain the Constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” The appeal remains expedited and the Appeals Court will issue a briefing schedule shortly. The Court’s full ruling appears HERE.
At this point we can’t predict what the impact of the reinstated stay might be, i.e., whether it will result in a further extension of the FinCEN reporting deadline beyond January 13th while the case is considered, and (if the Government wins) whether FinCEN will grant a new grace period voluntarily after the Fifth Circuit ultimately issues its opinion on the merits. We will of course keep you informed as the case progresses.
In the meantime, have a happy New Year!
Surprisingly (to this writer), the 5th Circuit has stayed the enforcement of the nationwide injunction against filing the CTA pending a full hearing by the court. This means that the December 31, 2024 filing deadline has been reinstated.
The 5th Circuit stated that the government has made a “strong showing” that the BOI filing requirements are constitutional. (But in a footnote, they added that “strong showing” does not necessarily mean “likelihood of success.”) They also pointed out that the last-minute stay of enforcement of a law passed by the “people’s representatives” inherently results in “irreparable harm.” Finally, the court noted that since the cost of filing might be less than $85 in time spent, the equities favored the government, and the public interest favors protecting against terrorism and money-laundering. The court’s decision is available HERE.
Based on the above, the stay has been lifted. The hearing by the full court on the appeal by the government of the motion for a preliminary injunction against enforcement of the BOI filing requirements also has been expedited.
What this means. Legally, this reinstates the filing deadline of December 31, 2024 for submitting Beneficial Ownership Information to the government. We still believe that a grace period (either formal or informal) will be granted by FinCEN in view of the holidays and the confusion generated by the initial stay. Nevertheless, we recommend that businesses subject to the CTA file their information on a timely basis if possible.
Unfortunately, the official extension of the filing deadline for Beneficial Ownership Information to December 31, 2025 also was removed from the stopgap spending bill ultimately approved by the House on Friday. We will see if the provision is reinserted when the more comprehensive spending bill is considered in March.
We wish everyone a wonderful holiday season!
The short-term government funding bill that was just released, and which keeps the government open until March, includes a one-year delay in the Beneficial Ownership Information filing requirements under the Corporate Transparency Act. See Section 122 of the bill on page 223. [2025 Extension]
The full bill is expected to be voted on later this week. Of course, the delay provision could always be removed prior to a vote, but this is a promising sign for community associations (not to mention other businesses). We will keep you advised of any further changes.
To All Board Members and Property Managers,
If you need to fulfill your mandatory Fair Housing training requirements under Westchester County law, please register for free by clicking the link below:
CLICK HERE to register for Fair Housing training on Thursday, January 16th, 2025, at 6:00 pm.
Eric will cover important topics such as:
- Introduction to Fair Housing Laws
- Housing Discrimination
- Emotional Support Animals
- Reasonable Accommodations
- Purchase Application Disclosures
- Complaints and Lawsuits
- Fiduciary Duties
- Q&A, and much more …
To attend a remote training session, you must pre-register by clicking on one of the above links and providing your full name. Plan to attend approximately 2 hours of online training using the Zoom webinar platform to obtain your certificate of completion. Course materials will be made available upon completion of your attendance. Non-Westchester County residents check your local jurisdiction’s training requirements.
We look forward to seeing you soon.
