Update 12/27/24: On December 26, 2024, the Fifth Circuit Court of Appeals reversed its own stay on the District Court's preliminary injunction, which had blocked enforcement of the January 1, 2025 compliance reporting deadline under the Corporate Transparency Act (CTA) in the case Texas Top Cop Shop v. Garland. Previously, FinCEN had already extended this deadline beyond January 1, 2025.
Update 12/24/2024: The Fifth Circuit Court of Appeals has lifted the nationwide preliminary injunction that had temporarily blocked enforcement of the Corporate Transparency Act (CTA). This ruling, issued on December 23, 2024, in the case of Texas Top Cop Shop, Inc. v. Garland, reinstates the CTA's beneficial ownership information (BOI) reporting requirements, pending further appellate review.Entities Formed Before January 1, 2024 must file their initial BOI reports by January 13, 2025, instead of the originally planned January 1, 2025.
A recent legal development may impact reporting obligations under the Corporate Transparency Act (CTA). On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting the enforcement of the CTA. This law requires businesses to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). The court cited constitutional concerns, ruling that the CTA likely exceeds Congress’s authority under the Commerce Clause and the Necessary and Proper Clause.
The injunction has paused the January 1, 2025, deadline for compliance with the CTA’s reporting requirements. However, it is important to note that this ruling is not a final judgment and is subject to appeal. The federal government is expected to challenge this decision, and additional cases in other jurisdictions may further influence the outcome.
Read More About FinCEN's BOI Reporting on FinCEN.gov Here
Read the M&S Article: Are You Required to Report Under FinCEN's New Ruling?
Business Owners: Reach Out to Your CPA for Guidance
In light of this development, business owners should reach out to your CPA and continue to monitor developments with the CTA and prepare to file the reports, if required, should the injunction be overturned.