The Supreme Court has stayed the nationwide injunction blocking the enforcement of the Corporate Transparency Act (CTA), but FinCEN says that Beneficial Ownership Information (BOI) reporting remains voluntary. On January 23, 2025, the Supreme Court granted the Government’s application for stay of the injunction issued by the United States District Court for the Eastern District of Texas in the Texas Top Cop Shop, Inc., et al. v. McHenry, et al. case.[1] The Supreme Court stayed the nationwide injunction pending the ruling on the appeal in the United States Court of Appeals for the Fifth Circuit. Oral arguments regarding the constitutionality of the CTA are scheduled to be held at the Fifth Circuit on March 25, 2025.
On January 24, FinCEN posted an alert on its website in response to the Supreme Court’s ruling in the Texas Top Cop Shop, Inc. case stating that reporting companies still are not required to file BOI Reports because a different federal judge has stayed the CTA reporting rules. FinCEN noted that reporting companies may continue to voluntarily submit BOI Reports. The full text of FinCEN’s latest alert following the Supreme Court’s ruling in the Texas Top Cop Shop, Inc. case is below:
On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
We are following developments relating to the Texas Top Cop Shop, Inc. case and the Smith v. U.S. Department of the Treasury case, and plan to provide further updates.
To read our previous Legal Alert regarding the Application for Stay filed with the Supreme Court, CLICK HERE.
***Updated as of January 24, 2025
[1] We note that the Texas Top Cop Shop, Inc., et al. v. Garland, et al. case was renamed to Texas Top Cop Shop, Inc., et al. v. McHenry, et al. because of the appointment of a new United States Attorney General. Previous Client Alerts will still refer to the case as Texas Top Cop Shop, Inc., et al. v. Garland, et al.
