Earlier this month, in the case of Texas Top Shop, Inc., et al. v. Garland, et al., a nationwide preliminary injunction went into effect that temporarily halted enforcement of the Corporate Transparency Act (the “CTA”) and put the Beneficial Ownership Information (“BOI”) reporting requirements on hold.
On December 23, 2024, the U.S. Fifth Circuit Court of Appeals stayed the nationwide preliminary injunction, effectively reinstating the CTA and its BOI reporting requirements. Accordingly, reporting companies were briefly required once again to file BOI reports under the CTA. Shortly after the December 23 order, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) extended certain reporting deadlines to January 13, 2025.
However, three days later, on December 26, 2024, a Fifth Circuit panel reinstated the nationwide preliminary injunction blocking enforcement of the CTA “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” FinCEN has yet to release a statement addressing the Fifth Circuit panel’s December 26 order.
Bottom Line: As a result of the Fifth Circuit decisions, the enforcement of the CTA has again been halted, at least temporarily while the current appeal is considered on its merits by the Fifth Circuit. This appeal has been expedited, and the Fifth Circuit will issue a briefing schedule shortly.
Felhaber will continue to closely monitor any developments regarding this matter.
Update.
FinCEN has confirmed on its website that 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.”