If you’re a business owner, you might not need to disclose your ownership information to the federal government—for now. A December 26, 2024, ruling by the U.S. Court of Appeals for the Fifth Circuit reinstated a nationwide injunction that pauses enforcement of the Corporate Transparency Act (CTA) and its regulations.
What Is the CTA?
The CTA, designed to fight money laundering and promote transparency, requires most businesses to report ownership details—including owner identification—to the Financial Crimes Enforcement Network (FinCEN). Noncompliance or providing false information could result in fines or imprisonment.
What’s Happening With the Litigation?
In May 2024, business owners filed a lawsuit challenging the CTA’s constitutionality, arguing it exceeds federal authority and infringes on constitutional rights.
Here’s the timeline:
- December 3, 2024: A federal court in Texas issued a nationwide injunction, temporarily halting CTA enforcement.
- December 23, 2024: The Fifth Circuit lifted that injunction.
- December 26, 2024: Also, the Fifth Circuit, but a different panel, restored this injunction.
The case, Texas Top Cop Shop v. Garland, is now scheduled for oral arguments before the U.S. Supreme Court on March 25, 2025. Until a decision is made, compliance with the CTA remains voluntary. FinCEN accepts reports, but there’s no deadline or penalty for noncompliance while the injunction is in place.
What Does This Mean for You?
For now, your business is not required to file a Beneficial Ownership Information (BOI) report. However, it’s wise to prepare:
- Gather the necessary ownership and company information.
- Stay informed about the legal developments, as compliance might be required on short notice if the CTA is upheld.
Contact Us
If you need guidance on whether you should file a BOI report, contact a member of our team for advice. Romano Law is here to help you navigate the CTA and keep you updated on any changes.
Contributions to this blog by Katherine Baeppler.
