On December 23, 2024, the Fifth Circuit Court of Appeals stayed the preliminary injunction issued by the Eastern District of Texas suspending enforcement of the Corporate Transparency Act (CTA). The order reinstates the original January 1, 2025 deadline for filing, on the grounds that the injunction has been in place for less than three weeks and businesses have had a year to file since the reporting deadline was announced.
Following the order, the Financial Crimes Enforcement Network (FinCEN), the federal agency charged with enforcing the CTA, issued a notice extending the deadline to January 13, 2025 for companies registered prior to January 1, 2024.
In keeping with most courts that have heard challenges to the CTA, the Fifth Circuit ruled that the federal government has made a “strong showing” that it is likely to succeed in defending the CTA’s constitutionality under the Commerce Clause.
While the case will still proceed on its merits in Texas, the opinion previews the Fifth Circuit’s view of the matter – it opines that the CTA’s numerous exemptions provide a rational basis to conclude that the CTA falls within the Commerce Clause and therefore is within the power of Congress. Other challenges remain pending, including before the Eleventh Circuit.
Companies that have not yet filed can do so online here. Please note that due to high traffic because of the stay of the injunction, the website may be having issues, and you may want to file outside of business hours when traffic to the website will be lower. FinCEN’s guidance for small businesses is available here.
We will continue to monitor developments.
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