Enforcement of the Corporate Transparency Act (the “CTA”) remains on hold while litigation proceeds, and reporting companies are therefore not required to file reports at this time. However, reporting companies may continue to submit reports voluntarily.
On December 3, 2024 a federal judge of the U.S. District Court for the Eastern District of Texas, Sherman Division, in the case of Texas Top Cop Shop, Inc. v. McHenry, issued a nationwide preliminary injunction against enforcement of the CTA. On January 23, 2025, the United States Supreme Court (SCOTUS) granted the government’s request to temporarily lift the McHenry injunction pending the conclusion of the government’s appeal of the injunction with the Fifth Circuit Court of Appeals and any subsequent hearing of the case before SCOTUS (should SCOTUS agree to hear the case). The Fifth Circuit is set to hear oral arguments on March 25, 2025. The full decision of SCOTUS is available here.
Notwithstanding SCOTUS’s decision in the McHenry case, a second nationwide injunction against enforcement of the CTA remains in place, issued on January 7, 2025 by a federal judge of the U.S. District Court for the Eastern District of Texas, Tyler Division, in the case of Smith v. United States Department of the Treasury. The government filed a notice of appeal to the Fifth Circuit on February 5, 2025. The decision of the district court is available here.
In response to the SCOTUS decision with respect to the McHenry injunction, FinCEN promptly issued an alert titled “Ongoing Litigation . . . & Voluntary Submissions” on its website, pursuant to which, among other things, it clarified that reporting companies (i) are not currently obligated to file beneficial ownership information reports under the CTA (BOIRs) and not subject to liability if they do not make filings while the Smith injunction remains in force; and (ii) may continue to submit BOIRs voluntarily.
