Corporate Transparency Act: Enforcement Halted (Again)
On December 26, 2024, the Fifth Circuit Court vacated its own “stay” of the nationwide preliminary injunction on enforcing the Corporate Transparency Act (CTA). This means the nationwide injunction is reinstated, and enforcement of the CTA and its filing deadlines are once again on hold.
12.27.24
As we previously reported, a federal judge in the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction in Texas Top Cop Shop, Inc. vs. Garland that enjoined enforcement of the CTA on a temporary basis.[1] On December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit ruled in favor of the U.S. Department of Justice’s (the DOJ) emergency motion for a stay of the nationwide preliminary injunction that blocked enforcement of the CTA, reinstating the reporting deadline. [2] In response, U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the reporting deadline for most reporting companies until January 13, 2025.
Now, as of December 26, 2024, the Fifth Circuit reversed its own motion and reinstated the nationwide injunction that blocks enforcement of the CTA. The Fifth Circuit’s order reads, in part:
“The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.”
Additionally, FinCEN will continue to comply with the court’s order and published the following statement:
“In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
While enforcement of the CTA reporting obligations has once again been halted, a final decision remains subject to the pending expedited appeal with the Fifth Circuit. Until a final ruling is issued regarding the CTA’s enforceability, reporting companies should continue to gather information and monitor for updates.
For additional information or assistance regarding the CTA, contact Jon Katona, Patrick Murphy, Samantha Blank or Madison Mueller.
For additional information on the CTA, please see our previous publications:
- Corporate Transparency Act Effective Date Approaches,
- The Corporate Transparency Act is in Effect: What You Need to Know,
- The Corporate Transparency Act Found Unconstitutional for Specific Plaintiffs
- Filing Deadline Approaches: The Corporate Transparency Act
- Court Issues Nationwide Injunction Against Enforcement of the Corporate Transparency Act Reporting Deadline
- Corporate Transparency Act: Nationwide Injunction and Next Steps
- Corporate Transparency Act: Back in Effect, with Deadline Extensions
You can also visit FinCEN’s BOI webpage here.
[1] Texas Top Cop Shop, Inc., et al. vs. Garland, et al., No. 4:24-cv-00478-ALM (E.D. Tex. Dec. 3, 2024).
[2] No. 24-40792 (5th Cir. Dec. 23, 2024).