On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., blocking enforcement of the Corporate Transparency Act ("CTA") and its beneficial owner information ("BOI") reporting requirements. In response, FinCEN issued an alert confirming that it will comply with the nationwide preliminary injunction for so long as it remains in effect.
FinCEN clarified that reporting companies are not currently required to file BOI reports and will not face penalties for failing to do so while the preliminary injunction remains in effect. However, reporting companies may continue to voluntarily submit BOI reports if they choose to do so.
In its alert, FinCEN reaffirmed the government's position that the CTA is constitutional. On December 5, 2024, the Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal in the case.
While the litigation continues, companies should stay informed and monitor developments, including updates from FinCEN and the Department of Justice regarding the appeal and any further court rulings. Reporting companies are encouraged to prepare their BOI reports to ensure readiness if the injunction is lifted. Companies may also voluntarily submit their BOI reports if desired.
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