CSG Law Alert: EB-5 Integrity Fee for FY 2025 Due in October, Status of NOITs Uncertain
Pursuant to the EB-5 Reform and Integrity Act of 2022 (“RIA”), every active EB-5 regional center must pay an annual “Integrity Fee” of $10,000 if the regional center has 20 or fewer investors, or $20,000 if the regional center has 21 or more investors. The fee is due between October 1 and October 30 each year and is paid in advance, i.e., the fee paid in October 2024 is for FY 2025. U.S. Citizenship and Immigration Services (USCIS) calculates the number of investors to include any investor that has filed an I-526 or I-526E petition, but not yet filed an I-829 petition.
The procedure for paying last year was through the pay.gov website. While we assume the procedure will remain the same, we are on the lookout for any alerts from USCIS that might alter the process. Click here for payment instructions.
The RIA provides for USCIS to assess a late fee if the Integrity Fee is not paid within 30 days of October 1. It further provides for the termination of any regional center that has not paid the fee within 90 days of the due date. USCIS has taken the position that termination is not discretionary but required by the RIA. Please note, USCIS requires not only the timely payment of the fee, but payment in the correct amount. Payment of $10,000 by a regional center with more than 20 investors, even if timely, would result in termination under current USCIS policy. Thus, it is important to accurately count the number of investors and err on the side of over counting.
Because USCIS was not able to effectively implement the RIA in 2022, it did not establish a mechanism for paying the Integrity Fee in 2022. Instead, it announced in the Federal Register that the Integrity Fee for FY 2023 (due on October 1, 2022) would be due on March 2, 2023, but that it would not take steps to terminate regional centers as long as they paid prior to May 31, 2023. USCIS later extended this deadline to December 29, 2023. The Integrity Fee for FY 2024 was due on October 1, 2023.
Unfortunately, the postponement of the 2022 payment to 2023 resulted in mass confusion. Many regional centers paid the Integrity Fee between March and May of 2023, and did not understand they needed to pay two Integrity Fees during calendar year 2023. The result is that some regional centers, estimated to be between 50 and 100, unknowingly failed to pay the FY 2024 Integrity Fee by December 29, 2023. This represents a substantial percentage of the 231 regional centers that filed an I-956G annual compliance form in 2023 (presumably representing all active regional centers in the U.S.). In May and June of 2024, USCIS sent Notices of Intent to Terminate (“NOITs”) to these regional centers. The NOITs stated that USCIS would not accept payments for FY 2023 or FY 2024 after December 29, 2023.
CSG lawyers helped several clients to prepare responses to these NOITs and is also planning to file a motion for preliminary injunction on behalf of multiple clients to prevent USCIS from terminating their regional centers. Clearly, if some 20-40% of existing regional centers unknowingly failed to pay the Integrity Fee, it suggests that USCIS did not provide adequate notice or clarity to the regulated public. The fee payment system provides no way to check on your payment or account or see if you have a balance due. USCIS did not impose a late fee or notify any regional centers that missed the payment prior to the NOITs. In addition, several regional centers filed I-956 or I-956F applications, with a $17,795 or $47,695 filing fee after December 20, 2023, but before the NOITs. USCIS accepted those applications and the filing fees. On whole, terminating these regional centers would be substantially unfair.
Our lawyers have been working with AILA and IIUSA to promote advocacy and lobbying efforts to get USCIS to extend the deadline in light of the agency’s failure to implement a process to pay the fee in 2022, leading to confusion and failure to implement a transparent and usable system for making and tracking payments. We are aware that preliminary injunctions have been granted preventing the termination of a regional center because of the NOITs, and we are aware of other lawsuits being filed. Ultimately, we believe that USCIS will allow affected regional centers to pay the missed fee, likely with a penalty, and avoid termination. For now, however, we continue to fight against the possible termination of affected regional centers.
I-956G season is here! The annual I-956G compliance filing for FY 2024, which ends on September 30, can be filed beginning on October 1, 2024, and must be filed by December 28, 2024. The I-956G form collects substantially more data than the former I-924A form and requires substantially more preparation. USCIS may impose fines for inaccurate reporting, so completing the I-956Gs correctly is of paramount importance. We recommend beginning the preparation as early as possible.
Should you have any questions about the Integrity Fee, please contact your CSG Law attorney or the author of this alert.