On the afternoon of December 23, 2024, in an unpublished decision, the Fifth Circuit Court of Appeals issued a stay of the nationwide preliminary injunction issued on December 3 against the enforcement of the Corporate Transparency Act.
What Does the Temporary Stay Mean?
The Fifth Circuit stay means FinCEN may enforce the CTA and its reporting deadlines while the constitutionality of the CTA is being appealed to the Fifth Circuit Court of Appeals in the Texas Top Cop Shop case.
A few hours later, on the evening of December 23, 2024, FinCEN announced limited extensions to the reporting deadlines in light of the Fifth Circuit decision. Specifically, FinCEN provided that "because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline" as follows:
- Reporting companies that were created or registered prior to January 1, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
- Reporting companies created or registered in the United States on or after September 4, 2024, that had a filing deadline between December 3, 2024, and December 23, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
- Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
- Reporting companies that are created or registered in the United States on or after January 1, 2025, have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
In addition to meeting these newly announced reporting deadlines, reporting companies would be well advised to continue to closely monitor any late-breaking developments in this highly litigious area.
For More Information
If you have any questions about this Alert, please contact Thomas R. Schmuhl, Jocelyn Margolin Borowsky, Joel N. Ephross, Bruce H. Jurist, Hope P. Krebs, Lee J. Potter Jr., any of the attorneys in our Corporate Transparency Act Group, the attorney in the firm with whom you are regularly in contact, or Michael A. Gillen or any of the professionals in the Tax Accounting Group.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
