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 Here
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.