On December 3, 2024, a federal judge granted a nationwide preliminary injunction enjoining the federal government from enforcing the Corporate Transparency Act (CTA). As we explained in previous alerts (linked here and here), the CTA imposes reporting requirements on millions of business and non-business entities, with most entities facing a reporting deadline of January 1, 2025. The Hon. Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas issued the preliminary injunction and reasoned that Congress likely exceeded its authority when passing the CTA.
The injunction states that the Financial Crimes Enforcement Network (FinCEN) may not enforce the CTA and that companies need not comply with the CTA's deadlines for filing beneficial ownership reports. It is important to remember that this injunction is not a final decision and instead temporarily halts enforcement of the CTA nationwide. Future enforcement of the CTA may resume as a result of subsequent litigation or appeals. FinCEN has not published a notice regarding the injunction at this time, and Reinhart will continue to monitor developments. For more information and questions, contact a member of the Corporate Law Practice or your Reinhart attorney.
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