On Dec. 26, 2024, the US Court of Appeals for the Fifth Circuit reinstated the nationwide preliminary injunction that enjoins enforcement of the Corporate Transparency Act (“CTA”), including the filing deadlines thereunder. The Fifth Circuit’s Dec. 26th order vacates the December 23rd order that had stayed the nationwide preliminary injunction pending the government’s appeal on the merits. The ruling effectively postpones the enforceability of the CTA and its reporting requirements.
Further Hearings Necessary
The Fifth Circuit determined that there was no harm in continuing the injunction until there was a full hearing on the merits of whether the new law is constitutional. Oral argument on the merits of the government’s appeal is scheduled for March 25, 2025.
FinCEN’s Response
In response to the Fifth Circuit’s ruling, the US Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) posted an alert on its website on Dec. 27, 2024. FinCEN issued a statement advising that “as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.” The statement also advised that “reporting companies may continue to voluntarily submit beneficial ownership information reports” but “are not subject to liability if they fail to do so while the [nationwide preliminary injunction] remains in force.” For more information, please see FinCEN Website.
Now What?
At this time, all beneficial ownership interest report (“BOI Report”) filings for both existing entities and newly formed/registered entities are voluntary. No BOI Reports are due on Jan. 1, 2025, or Jan. 13, 2025, which were prior BOI Report filing deadlines issued by FinCEN pursuant to the December 23rd order.
However, given the current information available and the quickly evolving situation regarding CTA compliance, we recommend voluntarily complying with the CTA’s Reporting Rule. Further judicial or legislative extensions will most likely just delay the inevitable and will get you out of monitoring the status of this case and whether you need to comply with this new law.
If you desire assistance complying with the Reporting Rule, please give us a call at 480-281-1512. Or if you desire more information on how to comply, please see CTA Compliance Tips.
