CTA Enforcement Still Blocked
On Thursday January 23, 2025, the U.S. Supreme Court ruled that the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) may enforce the Corporate Transparency Act (CTA). The Supreme Court’s decision lifted an injunction imposed by a lower court that had temporarily blocked enforcement of the CTA. This new ruling permits FinCEN to proceed with enforcement of the CTA while legal challenges continue in the U.S. Court of Appeals for the Fifth Circuit. The Supreme Court’s decision did not address the question of whether the CTA is constitutional.
Separate Nationwide Injunction Remains in Place
With that said, a separate nationwide injunction banning enforcement that was issued by a different federal judge in Texas in Smith v. U.S. Department of Treasury on January 7, 2025 still remains in place.
Therefore, FinCEN has advised that reporting companies are not currently required to file beneficial ownership information with FinCEN and reporting companies are not subject to liability if they fail to file this information while the Smith order remains in force. Reporting companies may continue to voluntarily submit beneficial ownership information reports.
For those reporting companies who have not already filed their BOI Reports, we recommend that you gather all information required to file and be prepared to file on short notice. We will be monitoring this situation closely and will provide updates as they occur. Please feel free to contact us if you would like assistance in evaluating your company’s CTA compliance requirements.
Monitoring Updates Closely
We will be monitoring this situation closely and will provide updates as they occur. Please feel free to contact us if you would like assistance in evaluating your company’s CTA compliance requirements.
The information in this article is informational in nature and should not be taken as formal legal advice. You should consult an attorney for advice regarding your individual situation.
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