As you may have heard, on March 1, 2024, the District Court for the Northern District of Alabama ruled that the Corporate Transparency Act of 2020 (“CTA”) is unconstitutional, and the U.S. Treasury Department is permanently enjoined from enforcing the CTA, but only against the two named plaintiffs in that case (Issac Winkles and National Small Business United dba National Small Business Association). National Small Business United, d/b/a the National Small Business Association, et al. v. Janet Yellen, Case No. 5:22-cv-01448 (N.D. Ala. March 1, 2024). In response to this decision, FinCEN issued a notice on March 4, 2024, confirming that (i) it will not enforce the CTA against the named plaintiffs in this case, and (ii) the CTA applies to all other business entities which are not exempt (i.e., reporting companies). That case was appealed by the government, and the appeal remains pending.
Other cases have been filed against the U.S. Government attempting to block the CTA, but no decisions have been rendered. On September 20, a U.S. District Court in Oregon issued a preliminary order that the plaintiff businesses in that case were not likely to succeed on the merits of their lawsuit attempting to block the CTA because the law’s functions are squarely within Congress’ authority over interstate and foreign commerce.
Under current law, the CTA’s reporting requirements continue to apply to all reporting companies other than Issac Winkles and National Small Business United. As a reminder:
- All reporting companies formed before 2024 must file by December 31, 2024.
- All reporting companies formed in 2024 must file within 90 days after the formation date.
- All reporting companies formed after 2024 must file within 30 days after the formation date.
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.
