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Three years ago, the Department of Treasury created the Financial Crimes Enforcement Network, or FINCEN, ostensibly to stop illicit corporate activity in the United States Their solution was to require every single American company, no matter how small, and with very few exceptions, to file a report called the Beneficial Ownership Interest Report. All companies are required to disclose who has an interest in the company, overriding the several states that have privacy laws that preclude this information from being made public. Using legal state privacy laws to insulate you from having to disclose your personal financial affairs, a stalwart in the arena of asset protection planning, has been in serious jeopardy. Until now.
In December, a Texas federal court ordered a nationwide temporary injunction, after a challenge to the constitutionality of the law.
There are pending before courts around the country several challenges to this reporting. On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction. The Department of Justice, on behalf of the Department of the Treasury (Treasury), filed a Notice of Appeal on December 5, 2024 and separately sought of stay of the injunction pending that appeal, filing an application for a stay with the Supreme Court of the United States on December 31, 2024. In the meantime, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. remains in effect. FinCEN has stated that it is complying with—and will continue to comply with—the district court’s order for as long as it remains in effect. As a result, reporting companies are not currently required to file beneficial ownership information with FinCEN. Reporting companies may continue to voluntarily submit beneficial ownership information reports.
If you are offended by the government intrusion into your privacy rights, write to your congress person and speak your peace. If you choose to file the report, we can assist.