On Again, Off Again: Corporate Transparency Act Cases
January 7, 2025
A flurry of court decisions in late December once again left the Corporate Transparency Act (CTA) and the Beneficial Ownership Information (BOI) reporting requirements in limbo ahead of the January 2025 filing deadline for existing legal entities.
Why it matters: Amid the decisions, Treasury’s Financial Crimes Enforcement Network (FinCEN) has paused BOI reporting requirements. Click here for additional background on the litigation. The latest procedural history is summarized on FinCEN’s website below:
- On Tuesday, Dec. 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., the U.S. District Court for the Eastern District of Texas, issued an order granting a nationwide preliminary injunction. The Treasury, via the Department of Justice, appealed that decision.
- On Dec. 23, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction.
- However, on Dec. 26, a different Fifth Circuit panel issued an order vacating the Court’s Dec. 23 order granting a stay of the preliminary injunction. On Dec. 31 the Department of Justice, on behalf of the Treasury, sought a stay of the injunction pending the ongoing appeal from the Supreme Court of the United States.
- The injunction issued by the district court in Texas Top Cop Shop, Inc. is once again in effect.
What’s next: The Supreme Court is likely to have the final say on the preliminary injunction and the constitutionality of the CTA. But changes in Congress and the administration could alter course, as there is both bipartisan support and frustration with the CTA.
- The original legislation was enacted in 2021 with broad bipartisan support as a measure to streamline BOI reporting and combat illicit finance. But FinCEN’s implementation has been rocky and delayed, adding to frustrations among some of the Act’s supporters.
- The original year-end 2024 government funding bill, torpedoed by Elon Musk, contained a provision that would have extended the CTA compliance deadline. That extension was not included in the slimmed-down version of the bill.
Contact David McCarthy (dmccarthy@crefc.org) with questions.