CTA Reporting Deadlines Suspended Once Again: Appellate Court Reinstates Nationwide Injunction Barring Enforcement of Corporate Transparency Act Days After Lifting It.

A federal appellate court has once again pulled the string on the game of judicial yo-yo that it has been playing with the Corporate Transparency Act (CTA). A mere three days after a panel of judges on the United States Court of Appeals for the 5^th Circuit lifted a previously issued nationwide injunction that had barred enforcement of the act and reinstated all reporting deadlines, a different panel of the same court vacated that order and put the injunction back in place.

The Dec. 26, 2024, order in Texas Top Cop Shop v. Garland et al. reinstated the injunction entered on Dec. 3, 2024, and subsequently lifted by the court’s Dec. 23, 2024, order. This back-and-forth means that, for the moment, all deadlines for covered Reporting Companies to submit Beneficial Ownership Information (BOI) to FinCEN, including those set for Jan. 2025, have been put back on hold. As confirmed by FinCEN in a statement released after the most recent ruling:

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.

It is important to note, however, that the preliminary injunction is only in place until the resolution of the federal government’s appeal of the district court’s order finding that the CTA was unconstitutional and barring enforcement of the act. That appeal is being heard on an expedited basis, meaning that, as happened briefly last week, Reporting Companies may have to file their BOI reports quickly if and when the court lifts the injunction once again.

As such, covered entities that have yet to submit their BOI information to FinCEN may wish to prepare for such a possibility by conducting the due diligence needed to report their BOI. However, for now, covered entities can ring in the new year without worrying about the reporting deadline they would have faced in January.

If you have questions or concerns about this most recent turn of events or your company’s obligations under the Corporate Transparency Act, please contact Dan McGlinn at Kreis Enderle.