Tired of the never-ending Corporate Transparency Act saga? Was another injunction on your 2025 Bingo card? Well, the back-and-forth isn’t over yet. If you received our newsletter last week, we provided a CTA Update…and perhaps unsurprisingly, the status of CTA reporting requirements has already changed since then. Here is what you need to know:
- On December 3, 2024, the U.S. District Court for the Eastern District of Texas in considering Texas Top Cop Shop v. Garland issued a nationwide preliminary injunction against enforcement of the CTA reporting regulations. The Texas Top Cop Shop injunction was stayed by the U.S. Supreme Court on January 23, 2025.
- On January 7, 2025, while the Supreme Court was considering the Texas Top Cop Shop injunction, a separate injunction was imposed in a different challenge to the CTA, Smith v. U.S. Dept. of the Treasury. However, On February 18, 2025 in the wake of the Supreme Court decision in Texas Top Cop Shop, the trial judge in Smith granted the government’s requested stay of the trial court’s earlier order, meaning that all of the active injunctions have been stayed and the CTA’s reporting requirements are once again in effect.
- In response to the injunctions being stayed, FinCEN announced on February 19, 2025 that reporting companies are once again required to file beneficial ownership information reports (BOIRs), and the reporting deadline will be extended for 30 days until March 21, 2025.
- Of note, the reporting deadline is subject to further modification (FinCEN stated that it will provide an update before enacting any deadline modifications to give reporting companies additional time for compliance).
- FinCEN indicated in its February 19 announcement that it intends to revise the BOI reporting rule to reduce the burden for lower-risk entities, including many U.S. small businesses.
- Further complicating matters, on January 24, 2025, the Protect Small Businesses from Excessive Paperwork Act of 2025, which among other items, would formally extend the reporting deadline for companies formed prior to January 1, 2024, was introduced in the U.S. House of Representatives. The Act (HR736) was passed by a vote of 408-0 in the U.S. House of Representatives on February 10; however, the Senate has yet to take any significant action on the bill.
Next Steps
Although CTA challenges continue to move through the courts, we recommend that reporting companies file their BOIR by or before the March 21 deadline.
Our attorneys will continue to monitor developments regarding the CTA and provide additional information as necessary. For more information about the CTA and its potential impact on you or your business, please contact us at cta@darslaw.com.