By - March 4, 2025
Categories: Accounting, General, Report
At Three Rivers Bookkeeping, we are dedicated to supporting auto repair shop owners across the US. We have your best interest in mind and want to make sure you are staying ahead of regulatory changes so you can see financial success in your business!
One such change that has been causing waves is the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements.
On March 25, 2025, the Fifth Circuit Court of Appeals is scheduled to hear oral arguments in a case challenging the CTA. This legal battle has the potential to change the future of BOI reporting.
I’m sharing this blog post because it’s essential for you, an auto repair shop owner, to understand what this case means for your business.
Understanding the CTA and BOI Reporting
The CTA, enacted as part of the Anti-Money Laundering Act of 2020, mandates that certain “reporting companies” file BOI reports with the Financial Crimes Enforcement Network (FinCEN). For many auto repair shops, this means reporting information about the “beneficial owners,” defined as the people in your business who:
- Exercise “substantial control” over the company. This can include your staff who serve as senior management or direct your business’s financial decisions.
- Own or control at least 25% of the ownership interests of your business.
The BOI report requires the following information for each beneficial owner:
- Full legal name
- Date of birth
- Current residential address
- A unique identifying number from an acceptable identification document (e.g., driver’s license, passport) and an image of that document.
Also, if your auto repair shop was created on or after January 1, 2024, you must also report information about the “company applicants,” which are the individuals who filed the documents to create the company.
The CTA has faced criticism regarding its scope and the burden it places on small businesses.
If you’re an auto repair shop owner who is concerned about the reporting requirements, you’ll want to stay tuned for the results of the upcoming court case!
The March Court Case
The Fifth Circuit Court of Appeals’ hearing is a pivotal moment in the CTA’s history. The challenge centers on the argument that the CTA exceeds Congress’s constitutional authority, specifically under the Commerce Clause and Necessary and Proper Clause.
Opponents argue that the broad definition of “reporting company” and the extensive data collection intrude on state-level business formation and legal regulations.
If the court rules against the government, the BOI reporting regulations will be drastically altered. Here’s a look at what may come:
- A complete repeal of the CTA.
- Amendments to the CTA to narrow its scope or simplify reporting.
- A stay or injunction on the enforcement of the CTA within the Fifth Circuit’s jurisdiction (Texas, Louisiana, and Mississippi), with potential ripple effects nationwide.
What This Means for YOU as an Auto Repair Shop Owner
While the outcome of the upcoming Fifth Circuit Court of Appeals hearing is uncertain, it’s absolutely critical for you, as an auto repair shop owner, to stay informed and prepared.
The Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements are still in effect, so you need to maintain compliance until the court reaches a decision.
Continue to abide by the current reporting guidelines so you do not experience potential penalties.
It’s also wise to actively monitor news and legal developments related to this CTA challenge. Stay tuned with Three Rivers Bookkeeping, where we will be providing updates.
If changes are put into motion, you may need to adjust your reporting practices to align with any new regulations or guidelines.
We’re Here to Help!
If you’re confused or are looking for advice, don’t hesitate to ask us! At Three Rivers Bookkeeping, we are committed to helping you navigate the complexities of your business while staying compliant. If you have any questions about the case or want to learn more about our financial services, contact us by clicking here today.
