Yesterday, the Supreme Court granted the government's motion to remove the District Court's injunction in McHenry v. Texas Top Cop Shop that paused compliance with the Corporate Transparency Act ("CTA"). However, compliance with the CTA is still paused by an order in Smith v. U.S. Dept of the Treasury, a separate challenge to the validity of the CTA pending in the Eastern District of Texas. On January 7, 2025, the District Court in the Smith case stayed the compliance deadlines in the Treasury Department's regulations implementing the CTA.
Today, the Financial Crimes Enforcement Network ("FinCEN") has provided guidance stating that the compliance stay issued in the Smith case remains in effect and that reporting companies will not be subject to fines if they do not comply with the CTA during the stay. FinCEN continues to accept beneficial ownership reports on a voluntary basis, so any company concerned with being able to complete its compliance obligations in a potentially short time frame has the option to report to FinCEN.
Honigman continues to closely monitor any developments in these cases as well as any changes to FinCEN's guidance. Because it is possible that the CTA's status may change, companies that would be subject to CTA reporting, particularly those with complex or substantial reporting obligations, should be ready to file should they become required to do so. Please contact the Honigman Corporate Transparency Act Task Force or your regular firm attorney with questions regarding your company's filing considerations.
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