The Corporate Transparency Act ("CTA") saga continues into the middle of February 2025. For the quick background, The CTA was initially set to go into effect on January 1, 2025, but thanks to a court case in the Eastern District of Texas (Texas Top Cop Shop, Inc. v. McHenry), that didn't happen. Well, it's actually a little more complicated than that. Some might say, I among them at this point, that it is ridiculously more complicated than that. The Top Cop court issued an initial nationwide injunction against enforcement of the CTA. Followed by the government quickly appealing the injunction to the Fifth Circuit, which reversed the injunction, followed three days later by a broader panel of the Fifth Circuit reversing that decision and reinstating the injunction. The government then appealed the matter to the U.S. Supreme Court, which on January 23, 2025 reversed the reversal of the reversal (e.g. stayed the injunction issued by the Top Cop court.) That was a lot of commas and exhausting...but we're not done. The CTA is still prevented from going into effect, even after the January 23rd order of the U.S. Supreme Court thanks to a different nationwide injunction being issued in a different Eastern District of Texas judge in a different case (Smith v. U.S. Dept. of the Treasury), which had been issued during the prior Top Cop back-and-forth. The federal government has now filed an appeal with the Fifth Circuit seeking to lift the injunction in Smith. This reflects a DOJ filing on February 5, 2025 under the new Trump administration. I personally find this interesting as the CTA was enacted as part of the National Defense Authorization Act for Fiscal Year 2021, and it was signed into law after Congress overrode President Trump's veto on January 1, 2021. I don't necessarily believe Trump vetoed the Act specifically because of the presence of the CTA, but it is interesting that Trump's DOJ is staying its course to press for enforcement.

So is the CTA even on President Trump's radar? Who knows, but it is certainly on the radar of the House and Senate. On January 15, 2025 identical bills were introduced in the House and Senate called, "The Repealing Big Brother Overreach Act," with the stated purpose of repealing the CTA. I'll note this legislation was introduced in the last Congress as well, but died a silent death. However, one of the many planks of the new Trump administration's platform is reducing red tape and regulations. Certainly, many people view the CTA as exactly that.

Where are we right now on February 12, 2025? Implementation of the CTA is stayed based on the injunction issued by the Smith court. But the DOJ's appeal of the injunction is pending before the Fifth Circuit, and a ruling could be issued any day. In it's recent appeal the DOJ stated it would extend the filing deadline for 30 days if it's appeal is granted, and would use that period of time to determine if lower-risk categories of entities should be excluded from the reach of the CTA's reporting requirements. Will this representation to the Fifth Circuit along with the fact the U.S. Supreme Court already reversed the injunction in Top Cop result in the Fifth Circuit reversing the nationwide injunction put in place by the Smith court? My crystal ball is on the fritz, but my Magic 8-Ball tells me, "all signs point to definitely maybe." Mysticism and voodoo aside, any business entity that believes it would be subject to the CTA's reporting requirements should, at the very least, gather all of the necessary reporting data and be prepared to report should the court issue an order lifting the nationwide injunction. As described above, the government (FINCEN & the Dept. of the Treasury) is stating affected entities will have 30 days to report from the date the injunction is lifted.

Conduct yourself accordingly!