Latest Update: On February 27, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced it will not be enforcing the current Corporate Transparency Act (“CTA”) deadline of March 21, 2025. New deadlines will be forthcoming. Please see our update for more information.
On January 23, 2025, and February 18, 2025, the preliminary injunctions blocking enforcement of the Corporate Transparency Act (“CTA”) nationwide were stayed. CTA filings are now required with deadlines extended to at least March 21, 2025. Please see our update for more information.
On January 23, 2025, this injunction was stayed by the Supreme Court of the United States. However, a similar order from Smith v. Department of the Treasury was in effect, so CTA filings were not required until the January 23, 2025, and February 18, 2025, orders.
On December 26, 2024, this injunction was reinstated by the Fifth Circuit Court of Appeals, so CTA filings were not required until the January 23, 2025, and February 18, 2025, orders. Please see our update for more information.
On December 23, 2024, this injunction was stayed by the Fifth Circuit Court of Appeals, so CTA filings were required until the December 26 order. Please see our update for more information.
As described in a prior article, beginning on January 1, 2024, the Corporate Transparency Act required companies to report beneficial ownership information (“BOI”) to the Financial Crimes Enforcement Network bureau (“FinCEN”) of the U.S. Department of the Treasury.
On December 3, 2024 the U.S. District Court for the Eastern District of Texas granted a preliminary injunction in Texas Top Cop Shop, Inc. et al. v. Garland et al., No. 4:24-CV-478 (E.D. Texas 12/3/24), which blocks enforcement of the CTA by FinCEN against all companies (unlike an Alabama ruling in March which only granted relief to that case’s plaintiffs) and stays all CTA reporting deadlines. As a result of the injunction, no one is required to file any BOI reports at this time.
In its Memorandum and Order, the Court found that the plaintiffs had met the requirements for a preliminary injunction and that the CTA is “likely unconstitutional as outside of Congress’s power.” The Court’s reasoning is supported by the finding that the CTA does not regulate commerce, as permitted under the Commerce Clause, but rather it attempts to create an activity where none currently exists. Additionally, the Court similarly found the CTA was not allowable under the Necessary and Proper clause, as applied with both the Commerce Clause and Congress’s powers to regulate foreign affairs.
The federal government has made no public announcement on its next steps, but it is expected that the Department of Justice will promptly appeal. While all CTA reporting deadlines are currently stayed, if the injunction is overturned, companies may once again have to file BOI Reports.
The Hinckley Allen team is available to answer your questions about this injunction or the CTA.
