As we previously reported, on December 3, 2024, a Federal District Court in Texas imposed a preliminary injunction preventing the U.S. Treasury Department and its Financial Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA) against all companies nationwide in the case of Texas Top Cop Shop, Inc. et al. v. Garland.
On December 23, 2024, a panel of the Fifth Circuit Court of Appeals granted a stay of that preliminary injunction, and on December 26, 2024, a different panel of the same Court of Appeals vacated the December 23 stay of the preliminary injunction, which allowed the preliminary injunction to remain in effect.
On January 23, 2025, the United States Supreme Court overturned the preliminary injunction in the Texas Top Cop Shop case. Under normal circumstances, that would mean that the CTA reporting rules would once again apply.
However, a different Federal District Court in Texas imposed a nationwide preliminary injunction on enforcement of the CTA in the case of Smith v. U.S. Department of Treasury on January 7, 2025. FinCEN has acknowledged the effect of this injunction by noting on its website that at this time, reporting companies are not required to file their CTA Beneficial Ownership Reports.
Accordingly, as of today, non-exempt reporting companies are NOT required to file their CTA Beneficial Ownership Information Reports with FinCEN.
If your company has not yet filed its CTA report and is not exempt from filing, we recommend that you continue to compile the information necessary to file, but postpone your filing until the latest preliminary injunction is either stayed or overturned. As confirmed by FinCEN, you are permitted to file Beneficial Ownership Information Reports on a voluntary basis if you so desire.
If you have any questions, please contact Edmund G. Kauntz at [email protected] or Nathaniel D. Tucker at [email protected] or via telephone at 216-292-5807.
