Future of the Corporate Transparency Act to be Determined in New Year

 

Uncertainty over the future of the Corporate Transparency Act has been at an all-time high in the last few weeks of 2024 as the federal government and plaintiffs in the case of Texas Top Cop Shop, Inc. v. Garland battle it out over the constitutionality of the new law. As of today, business owners are not required to comply with any of the reporting requirements imposed under the new Act, including the January 13, 2025 reporting deadline for businesses formed prior to 2024.

 

Corporate Transparency Act to Date

• On January 1, 2024, the Corporate Transparency Act went into effect which requires business owners to report ownership information by filing a Beneficial Owner Information Report with the United States Department of Treasury Financial Crimes Enforcement Network.

 

• On May 28, 2024, the case of Texas Top Cop Shop, Inc. v. Garland was filed in the United States District Court, Eastern District of Texas challenging the constitutionality of the Corporate Transparency Act.

 

• On December 3, 2024, the federal district court judge issued a preliminary injunction preventing enforcement of the Corporate Transparency Act nationwide.

 

• On December 13, 2024, the federal government filed an appeal seeking to stay the preliminary injunction with the United States Court of Appeals, Fifth Circuit.

 

• On December 23, 2024, the United States Court of Appeals, Fifth Circuit issued a stay of the preliminary injunction. In effect, this reinstated the reporting requirements of the Corporate Transparency Act.

 

• Following the December 23, 2024 Court Order, FinCEN announced that it was extending the compliance deadline for existing businesses formed prior to 2024, from January 1, 2025 to January 13, 2025.

 

• On December 26, 2024, the United States Court of Appeals, Fifth Circuit vacated its prior ruling, effectively preventing the enforcement of the Corporate Transparency Act once again.

 

Future of the Corporate Transparency Act

The future of the Corporate Transparency Act remains unclear. Currently, the United States Court of Appeals, Fifth Circuit is reviewing the merits of the federal governments appeal of the District Court’s preliminary injunction. Based on the briefing schedule released by the Court, it appears that the injunction preventing enforcement will remain in effect at least until Spring 2025.

 

Black McCuskey is monitoring this case and ongoing developments regarding the Corporate Transparency Act. If you have questions, please contact one of our experienced corporate attorneys at Black McCuskey.

​​