On December 3, 2024, a Texas federal district court preliminarily blocked enforcement of the Corporate Transparency Act (CTA) nationwide. This decision comes just weeks before the January 1, 2025 deadline for affected business entities to file Beneficial Ownership Information reports with the Financial Crimes Enforcement Network (FinCen).
The Corporate Transparency Act has faced push back from both courts and lawmakers. Some contend that FinCen has not adequately publicized the requirements or clarified reporting procedures. Others have raised constitutional concerns with the law.
The Texas court decision ruled in favor of a group of six plaintiffs including five entities and one individual granting a preliminary injunction barring enforcement of the BOI reporting requirements. This ruling does not remove the filing requirement but rather bars FinCen from enforcing the requirements nationwide.
This preliminary injunction is far from the final word on BOI reporting for sure The US government will certainly appeal the injunction. The timing on an appeal and what will happen after that is certainly not clear. For now, FinCen is barred from enforcing BOI reporting but how long that remains the case remains to be seen. Some may decide to file the reports prior to the January 1, 2025 deadline and others might decide to hold off until there is further clarity, at least as long as the preliminary injunction is in place.
We will continue to provide information regarding BOI and the status of the preliminary injunction as the legal process plays out.
