FleetOwner: What Happened with Small Carriers’ Beneficial Ownership Information?

The requirement to submit BOI to the Financial Crimes Enforcement Network is part of the Corporate Transparency Act. However, that requirement was paused. The delay came from a confusing court battle full of reversals, revisions, and more reversals.

Here is what happened to the Corporate Transparency Act—and how small carriers should prepare for the future—with expertise from Scopelitis attorneys Kathryne Feary-Gardner, Jordan Yu, and J.D. Robinson III.

What is the Corporate Transparency Act?

The Corporate Transparency Act is a 2021 law introduced to combat money laundering from small companies. The law, part of the 2021 National Defense Authorization Act, introduced reporting requirements for small companies’ beneficial ownership information.

The bill specifically targets any companies that employ 20 or fewer employees (with many exceptions), including motor carriers. FinCEN estimated about 32 million entities would need to report for the first deadline. The agency would require a business to submit the ownership information just once and update its reports as the ownership information changes.

Under the law, these businesses would have to provide beneficial ownership information—namely, a list of identifying information for each person with ownership or control over the company—to FinCEN.

“The CTA’s reporting requirements are designed to establish the creation of a national registry of beneficiary owners of select businesses, which U.S. authorities can use to prevent illicit activity conducted through shell companies and to combat money laundering,” Scopelitis’s attorneys explained.

The start of 2025 was going to be the first mandatory CTA reporting deadline. FinCEN set its first beneficial ownership reporting deadline for January 1—but legal battles in federal court changed things.

What happened to the filing deadline?

The CTA faced several legal challenges arguing that the reporting requirement is unconstitutional. One lawsuit in Texas—Texas Top Cop Shop, Inc., et al. v. Garland, et al.—convinced a federal judge to temporarily block the act’s requirements nationwide.

On December 3, a Texas federal judge issued a preliminary injunction in favor of the plaintiffs, temporarily prohibiting FinCEN from enforcing CTA. With this injunction, small carriers no longer needed to follow the January 1 deadline. Companies could still voluntarily submit ownership information but with no legal obligation.

On December 23, an appeals court reversed the injunction. FinCEN posted an alert to remind companies that they, once again, needed to follow reporting requirements. To accommodate the pause and confusion, FinCEN delayed its reporting deadline to January 15.

On December 26, another reversal. A panel of judges reversed the appeals court decision, resuming the injunction and again pausing CTA’s reporting requirement.

On December 31, the federal government asked the Supreme Court to reverse the injunction.

“At this point, BOI reporting is voluntary,” Scopelitis’s attorneys said.

Next in the court system

The Texas district court case that forced FinCEN to pause CTA enforcement will continue to move through the legal system.

“The case currently sits before the Fifth Circuit. Appellate briefs are due with the court in February, and oral arguments are scheduled for late March,” Scopelitis’s attorneys explained. “However, the DOJ also filed an emergency motion with the U.S. Supreme Court requesting that the Court stay the nationwide injunction. Alternatively, if the Court does not decide to stay the nationwide injunction, the DOJ is requesting that the Court limit the scope of the injunction to the parties involved in the litigation rather than apply it nationwide.”

In the Supreme Court, Justice Alito would likely rule on the nationwide injunction, Feary-Gardner, Yu, and Robinson said. His ruling could either continue the injunction, pause the injunction, or narrow it to only the parties involved. If the Supreme Court pauses the injunction, the case would move out of the Fifth Circuit Court of Appeals and back to the Texas district court.

“The merits of the case have yet to be decided with the U.S. District Court for the Eastern District of Texas where plaintiffs challenged the constitutionality of the CTA. However, we expect the court to find the CTA unconstitutional,” Scopelitis’s attorneys said. “Should the court find the CTA unconstitutional, we expect the decision to be appealed to the Fifth Circuit and potentially find its way to the Supreme Court.”

The courts could repeal CTA entirely, revise its regulations to comply with the constitution, or allow CTA to resume as-is. If CTA is allowed to resume, other court challenges could still threaten the law’s execution.

What’s next for small carriers?

For now, carriers with 20 or fewer employees do not have to submit ownership information to FinCEN—but may want to prepare the information for any additional reversals.

“Companies can voluntarily report, but there’s no longer a mandatory deadline,” the attorneys told FleetOwner. “However, given that CTA enforcement remains a moving target, companies should move ahead with determining whether they are subject to reporting requirements and what information should be included in the BOI report so as to avoid being caught on their backfoot.”

Failing to comply with CTA can include hefty costs.

“CTA allows for civil penalties of up to $500 for each day such willful violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000,” Scopelitis’s attorneys said.