1/24/2025

ALERT: Corporate Transparency Act Update

As Dilworth Paxson advised our clients, on December 26, 2024, the full Fifth Circuit Court reversed a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit, reinstated an injunction against enforcement of the Corporate Transparency Act (“CTA”), and again halted the enforcement of the CTA nationwide, while the merits of the case are under expedited appellate review in Texas Top Cop Shop, Inc., et al. v. Garland, et al.  The underlying District Court order temporarily blocked the enforcement of the CTA and its Beneficial Ownership Information Report (“BOIR”) filing obligations.

However, on January 23, 2025, the Supreme Court reversed the Fifth Circuit and reinstated the enforcement of the CTA nationwide, while the merits of the case are under expedited appellate review. In response, FinCen released a statement January 24, 2025, stating that because a separate nationwide injunction issued by a different Texas court remains in place, reporting companies are still not required to report their BOI and enforcement of the CTA continues to be paused.  The second court case is Samantha Smith and Robert Means v. U.S. Department of the Treasury, No. 6:24-CV-336 (E.D. Texas 1/7/2025).

While enforcement of the reporting requirements is currently suspended, as seen this week, the reporting requirements and deadlines can change quickly as the courts continue to work through the substantive issues in the case.  We will continue to monitor the situation and provide updates as they become available.  If you have not already reported your Beneficial Ownership Information to FinCen, please be vigilant, as the reporting deadlines could be reinstated with a short deadline.