February 19, 2025 Update:
After various court rulings, FinCEN has reinstated the reporting requirement for Beneficial Ownership Information (BOI) reporting. As a result, businesses now MUST complete the BOI reporting to FinCEN by March 21, 2025.
You can see a timeline of the various court rulings at the end of this article. CalChiro is continuing to monitor this (obviously) fluid situation and will inform our members of any future changes… again.
BOI Is Required Again
Updated: Corporations and Limited Liability Companies: “FinCEN” Reports Due by March 21, 2025, Under Transparency Law
Editor’s Note: As of February 19, 2025, after multiple court rulings, the Beneficial Ownership Information reporting is required once again. Based on these recent court decisions, CalChiro is now encouraging our members with corporations and LLCs to complete the following:
The federal Corporate Transparency Act (CTA) requires small businesses, including health care practices structured as corporations or PLLCs, to file reports containing information about the individuals who own or control them to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. Fin-CEN then supplies that information to law enforcement agencies to combat money laundering and other illegal activities. The information is not made available to the general public.
Court History – The requirement was challenged in numerous courts and a previous preliminary injunction has now been reversed by the Fifth Circuit Court of Appeals. The rule was also challenged by National Small Business United. In this specific case, the court struck the rule only as to named members in the lawsuit, and the U.S. Treasury Dept. appealed.
IMPORTANT: The reporting requirement applies to California corporations and LLCs, including medical corporations, professional services corporations, and professional limited liability companies. The filing deadline is now March 21, 2025.
The government has made available a step-by-step simple form that is available here.
You can file your report here.
Important! Ensure you are filing on the government’s site by looking at the URL and ensuring it is a “.gov” site (i.e., https://boiefiling.fincen.gov/fileboir). Although some legitimate businesses assist owners with their submission (for a fee), some sites are not legitimate and attempt to collect private information. Use caution!
Our doctors who have filed it have reported that it is fairly simple and only took about 10 minutes to complete. It only applies to corporations and LLCs, which have to report beneficial owners, defined as 1) any individual who directly or indirectly exercises substantial control over the company, or 2) owns or controls at least 25% of the ownership interests of the company.
25% ownership is, of course, straightforward, but “substantial control” is the gray area. The term “substantial control” is defined broadly and encompasses senior officers as well as all individuals who direct, determine, or have substantial influence over important decisions made by a reporting company. One FINCEN document further defines substantial influence by including individuals who influence “significant policies or procedures.”
The substantial control definitions are vague enough to possibly include, for example, a HIPAA Privacy Officer or an office manager who may have account signature authority or other significant responsibilities. However, the agency has not provided additional clarification in this area. CalChiro recommends that corporate or PLLC practice owners review staff job descriptions and use their best judgment about which individuals to include on the report.
Timeline of Court Action
The following is a list of pertinent court rulings over the last several months:
- 12/3/2024 – A Texas Federal Court (Top Cop. Shop, Inc. v. Garland) issued a preliminary injunction halting the requirement until its final ruling.
- 12/23/2024 – The Fifth Circuit Court (Top Cop. Shop, Inc. v. Garland) reversed the lower court’s preliminary injunction that reinstated the filing requirement.
- 12/23/2024 – FinCEN extended the reporting deadline to January 13, 2025.
- 12/26/2024 – Fifth Circuit Court (Top Cop. Shop, Inc. v. Garland) reversed its own reversal and reinstated the lower court’s preliminary injunction and, once again, halted the reporting requirement.
- 1/7/2025 – U.S. District Court for the Eastern District of Texas (Smith v. U.S. Department of the Treasury) enjoined enforcement of the CTA by a preliminary injunction.
- 1/23/2025 – U.S. Supreme Court lifted the (Top Cop. Shop, Inc. v. Garland) preliminary injunction BUT did not set aside the U.S. District Court for the Eastern District of Texas (Smith v. U.S. Department of the Treasury).
- 2/17/2025 – U.S. District Court for the Eastern District of Texas (Smith v. U.S. Department of the Treasury) reversed its decision from January 7. It reinstated the reporting requirement based on the 1/23 Supreme Court ruling.
- 2/18/2025 – FinCEN issued a notice reinstating the reporting requirement with a deadline of March 21, 2025.
December 27, 2024 Update:
Another court ruling has been issued regarding the Corporate Transparency Act (CTA) and its upcoming deadlines.
Recently, we sent you communication regarding the Financial Crimes Enforcement Network’s (“FinCEN”) January 13, 2025, extension to file beneficial ownership information (BOI) reports for most reporting companies.
On December 26, the Fifth Circuit Court reversed its December 23 ruling below.
As a result, businesses do NOT have to complete the BOI reporting to FinCEN.
Timeline of Rulings:
- 12/3/2024: A Texas Federal Court issued a preliminary injunction halting the requirement until their final ruling.
- 12/23/2024: The Fifth Circuit Court reversed the lower court’s preliminary injunction that reinstated the filing requirement.
- 12/23/2024: FinCEN extended the reporting deadline to January 13, 2025.
- 12/26/2024: Fifth Circuit Court reversed their own reversal and reinstated the lower court’s preliminary injunction and, once again, halted the reporting requirement.
We want to remind you of the importance of seeking legal counsel regarding the CTA. Attorneys have specific expertise in this area and are the best equipped to guide you through these complex legal matters.
Additionally, we understand that the ongoing court decisions surrounding the CTA may raise concerns, and remain committed to keeping CalChiro membership informed with updates as new developments arise.
December 26, 2024 Update:
Editor’s Note: On December 23, 2024, a federal appeals court again considered this issue and reversed the previous ruling. In light of the December 23, 2024, decision by the U.S. Court of Appeals for the Fifth Circuit, the preliminary injunction against the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements has been reversed, and the reporting requirement is once again in effect. While the ruling re-establishes reporting obligations for most companies, the Department of the Treasury has extended key deadlines to accommodate businesses affected during the injunction period. Reporting companies now have until January 13, 2025, to file their initial BOI reports.
Based on this decision, the California Chiropractic Association (CalChiro) is now encouraging our members with corporations and LLCs to complete the following:
BOI Requirement Reinstated
The federal Corporate Transparency Act (CTA) requires small businesses, including health care practices structured as corporations or PLLCs, to file reports containing information about the individuals who own or control them to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. Fin-CEN then supplies that information to law enforcement agencies to combat money laundering and other illegal activities. The information is not made available to the general public.
Court History — The requirement was challenged in numerous courts and a previous preliminary injunction has now been reversed by the Fifth Circuit Court of Appeals. The rule was also challenged by National Small Business United. In this specific case, the court struck the rule only as to named members in the lawsuit, and the U.S. Treasury Dept. appealed.
IMPORTANT: The reporting requirement applies to California corporations and LLCs, including medical corporations, professional services corporations, and professional limited liability companies. The filing deadline is now January 13, 2025.
The government has made available a step-by-step simple form that is available here.
Our doctors who have filed it have reported that it is fairly simple and only took about 10 minutes to complete. It only applies to corporations and LLCs, which have to report beneficial owners, defined as 1) any individual who directly or indirectly exercises substantial control over the company, or 2) owns or controls at least 25% of the ownership interests of the company.
25% ownership is, of course, straightforward, but “substantial control” is the gray area. The term “substantial control” is defined broadly and encompasses senior officers as well as all individuals who direct, determine, or have substantial influence over important decisions made by a reporting company. One FINCEN document further defines substantial influence by including individuals who influence “significant policies or procedures.”
The substantial control definitions are vague enough to possibly include, for example, a HIPAA Privacy Officer or an office manager who may have account signature authority or other significant responsibilities. However, the agency has not provided additional clarification in this area. CalChiro recommends that corporate or PLLC practice owners review staff job descriptions and use their best judgment about which individuals to include on the report.