The Chronicles Of Grant County
New Federal Regulatory Requirements
Affecting Businesses In Southwest New Mexico
Part Two
The logo of the Financial Crimes Enforcement Network of the United States Department of the Treasury. (The image was provided courtesy of the U S Department of the Treasury.)
While most businesses are faced with a deadline to meet new regulations from the Federal government, a limited number of businesses have been given a reprieve because of the decision of a Federal District Court in Alabama.
As detailed in Part One of this news series, most businesses in southwest New Mexico – and throughout the United States – are required to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN), a division of the United States Department of the Treasury, by January 1, 2025. Part One of the news series detailed aspects of these new requirements as well as the specific individuals and entities that may be exempted from filing BOI reports.
Members of one organization and a couple of others have secured the right – at least temporarily – to not comply with these new Federal requirements.
In a statement provided on December 2, 2024, Molly Day, Vice President of Public Affairs of the National Small Business Association (NSBA), stated that "In November [of] 2022, NSBA filed suit against the Treasury Department's Financial Crimes Enforcement Network (FinCEN) over the Corporate Transparency Act [CTA] and required Beneficial Ownership Information [BOI] reporting. The law was deemed unconstitutional by the U S District Court of the Northern District of Alabama on March 1, [2024,] meaning any NSBA member as of March 1, 2024, does not have to comply with the CTA – for now."
The NSBA describes itself as "…a staunchly nonpartisan organization, with decades of small-business advocacy expertise – from our long-serving leadership to our knowledgeable and well-connected government affairs team – we are proud to be the nation's first small-business advocacy organization."
According to a statement from the FinCEN regarding the judicial decision on March 1, 2024, "…a Federal District Court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act [CTA] exceeds the Constitution's limits on Congress's power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act [CTA] against the plaintiffs."
The United States Department of Justice appealed the Federal District Court's decision on behalf of the Department of the Treasury on March 11, 2024.
On that same date, the FinCEN updated a news release issued by the Federal agency on March 4, 2024. A portion of the news release is as follows:
"While this litigation is ongoing, FinCEN will continue to implement the Corporate Transparency Act as required by Congress, while complying with the court's order. Other than the particular individuals and entities subject to the court's injunction, as specified below, reporting companies are still required to comply with the law and file beneficial ownership reports as provided in FinCEN's regulations."
"FinCEN is complying with the court's order and will continue to comply with the court's order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time."
Arguments on the appeal were heard early in the Fall of 2024, according to the NSBA.
"NSBA's legal team made arguments before the Eleventh Circuit Appeals Court on September 27, 2024, and we anticipate a decision before the end of the year, however, there are no guarantees," the statement provided by Ms. Day continued. "Even if they affirm the [Federal] District Court's ruling that the CTA is unconstitutional, that would only extend the CTA's unconstitutionality ruling to business owners in the states of Alabama, Florida, and Georgia."
"As it stands today – November 21, 2024 – if you were an NSBA member in good standing as of March 1, 2024, the business entity under which you joined NSBA is currently exempt from BOI reporting due to FinCEN," detailed the statement provided from Ms. Day on December 2, 2024. "Please note this important distinction: ONLY the entity that is named as your business under NSBA is exempt from BOI filings."
Additional cautions were included in the statement provided by Ms. Day:
"If you have other entities that are NOT listed as your business under the NSBA membership, you DO have to file BOI reports on those entities."
and
"We are cautioning NSBA members and nonmembers alike, however, that things are continually changing in this case. We will continue to update everyone in the NSBA orbit – be sure you're following us on social [media and through]…our Weekly Advocate newsletter."
Bottom-line, most businesses in southwest New Mexico are under Federal mandate to file BOI reports with the FinCEN by January 1, 2025.
As noted in Part One of this news series, businesses may want to contact an attorney or another professional of your choice to determine whether you may be exempt from filing a BOI report with the FinCEN or if you are required to make such a filing before the end of this year.
Part Three of this news series will detail the role of Senator Marco Rubio in making these new regulations law. Senator Rubio has been nominated by President Donald Trump to be United States Secretary of State in the new Administration.
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© 2024 Richard McDonough
