Folks, we are back to it; the Corporate Transparency Act (“CTA:). I previously posted about the ongoing saga that is the implementation of the CTA here, if you are looking for a quick refresher. Last we visited our fledgling new law promoted to help the government crackdown on national security threats, the reporting requirements for millions of entities were put on hold by a little U.S. District Court in the Eastern District of Texas (Smith v. U.S. Department of the Treasury). Well, that same court has now reversed itself and stayed its own injunction. Specifically, the District Court in Smith v. U.S. Department of the Treasury stayed its injunction preventing the Financial Crimes Enforcement Network (“FINCEN”) from enforcing the reporting requirements under the CTA requiring millions of qualifying business entities to disclose the Beneficial Ownership Information (“BOI”).

As previously discussed, under the original deadline entities were to report such information by January 1, 2025. As also previously discussed in my prior post referenced above, through a gauntlet of legal machinations this filing deadline was halfted, started, halted, … I’m dizzy. Back to the present day. As of the above-referenced latest order in Smith, enforcement of the CTA reporting requirements is back on. FINCEN wasted no time, stayed true to its prior representations to the court, and promptly issued a February 18, 2025 notice setting a 30-day deadline for all qualifying entities to report their BOI, March 21, 2025 (see the notice here). That said, there is still some uncertainty as FINCEN also states in its notice that it will further assess its requirements for reporting guidelines prior to the March 21st deadline, and as a result reporting companies may (emphasis on MAY) be granted additional time to comply with their BOI reporting obligations.

In its notice, FINCEN discusses the potential of modifying the reporting requirements to lessen the burden on small business and those less likely to pose a national security threat. So as it stands today, there is a stated March 21st CTA reporting deadline, with an uncertain possibility of a further extension, a potential tweaking of what business entities must report, and to what extent. But for now the guidance is clear that any entity qualifying under the provisions of the CTA must report their BOI by March 21st. Of course that could change again tomorrow. And for additional piling on, note in the FINCEN notice that if an entity has already qualified for some other extension to the reporting deadline (i.e. those affected by a recent natural disaster, etc.) then this new March 21st deadline does not otherwise shorten such extension (see FINCEN notice for more detail).

I encourage you to review FINCEN’s notice. I also encourage you, as I did in my prior post, to gather all of your BOI and ensure you are prepared to report same to FINCEN by the ultimate filing deadline (currently March 21, 2025). But stay tuned as this has been a saga prone to abrupt U-turns. If you are uncertain as to what the CTA is, what it requires and who it applies to, I encourage you to seek professional guidance on the topic. For example, you could contact an attorney like me (hey, that’s convenient).

Conduct yourself accordingly!

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!