By Roland Love, Independence Title Vice President and Attorney
Hold on tight … for now, the Corporate Transparency Act (CTA) is again on hold. The U.S. Court of Appeals for the Fifth Circuit has reinstated the nationwide preliminary injunction issued December 3rd against the CTA by the U.S. District Court for the Eastern District of Texas. There is an accelerated briefing schedule in place that may well lead to the U.S. Supreme Court and/or Congress pulling back funding or passing legislation affecting the CTA. The first part of 2025 promises to be impactful for the CTA.
So, for the time being, there is no requirement for business entities to file a BOI (Beneficial Ownership Information) report, although the Financial Crimes Enforcement Network (FinCEN) is accepting voluntary fillings. You can find those details at FinCEN – Beneficial Ownership Information. Many other entities continue to gather the necessary information – just in case.
For those following the storyline, the District Court in Top Cop Shop, Inc. v. Garland determined that the CTA was “likely unconstitutional.” It issued the December 3rd preliminary injunction to preserve the status quo until the matter could be fully considered on the merits. FinCEN, part of the Treasury Department, immediately appealed and asked that the injunction be stayed. FinCEN also released a bulletin indicating it would abide by the ruling until further orders.
On December 23rd, the Fifth Circuit granted FinCEN’s request that the preliminary injunction be stayed. FinCEN published an alert it would extend the year-end deadline to January 13th, 2025. The rush was back on to timely file the required BOI reports.
However, at least one more “loop the loop” remained, and on December 26th, the Fifth Circuit vacated that portion of its previous order, staying the preliminary injunction.
So, is the wild ride over? There could yet be another curve, though less likely at this point. For sure, there will be extensive briefing and argument. And who knows what a new Congress and President might do? Consultation with your attorney may be a good first step, but certainly, keep an eye on the track.
