CTA Meets the Supreme Court

Published: January 9, 2025

On December 3 the United States Court of Appeals for the Fifth Circuit paused the requirement for reporting companies to file Beneficial Ownership Information Reports (BOIR), as required by the Corporate Transparency Act (CTA). The month of December was a busy one for the CTA as it included: court appeals, initial statements by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), motions, and an additional statement by FinCEN which extended the filing deadline. (A timeline of events is shared below.)

The most recent order from the Fifth Circuit has paused the BOIR filing requirement. In response, FinCEN filed an application for a stay of the December 3 injunction with the Supreme Court of the United States.

The Supreme Court’s decision may not determine the merits of the law itself, and it is likely litigation will continue, though their ruling will either solidify the current injunction or remove those protections and again require that businesses file the BOIR. Justice Samuel Alito asked the Plaintiffs in the Fifth Circuit case to respond to the Government’s appeal no later than 4 PM on January 10, 2025, so a ruling is not expected any earlier, though a quick decision is possible.

Litigation remains ongoing. Updates will continue to be shared.

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Timeline of Events

• January 1, 2024 – The CTA went into effect, creating reporting requirements for a vast majority of small businesses and family entities in the U.S. (Review “The Corporate Transparency Act: It Applies to More Than Just Corporations!”)
• March 3, 2024 – The CTA was ruled unconstitutional by the United States District Court for the Northern District of Alabama. (Review “Corporate Transparency Act Unconstitutional, Judge Rules”)
• December 3, 2024 – The District court orders a nationwide preliminary injunction on the enforcement of BOIR reporting.
• December 5, 2024 – The Government appealed the District Court’s ruling to the Fifth Circuit.
• December 6, 2024 – FinCEN issued a statement making filing of BOIRs voluntary.
• December 23, 2024 – The Fifth Circuit granted the Government’s emergency motion for a stay pending appeal. FinCEN issued a statement requiring BOIR report filing with extended deadlines. (Review “Corporate Transparency Act Filing Requirements Reinstated: Filing Deadlines Confirmed by Department of Treasury”)
• December 26, 2024 – The Fifth Circuit vacated the stay, thereby enjoining enforcement of the CTA. (Review “Corporate Transparency Act Injunction Reinstated”)
• December 27, 2024 – FinCEN issued a statement which – again – made filing of BOIRs voluntary.
• December 31, 2024 – FinCEN filed an application for a stay of the December 3, 2024 injunction with the Supreme Court.