In yet another twist, the Fifth Circuit Court of Appeals reversed itself last night, reinstating the nationwide injunction of the Corporate Transparency Act (“CTA”) and its filing obligations. As of now, all deadlines are halted.
By way of background, the nationwide injunction on enforcing the filing requirements of the CTA was first imposed by the United States District Court for the Eastern District of Texas on December 3, 2024. On December 23, 2024, a three judge panel of the United States Fifth Circuit Court of Appeals overturned the December 3 injunction, reinstating the CTA’s filing deadlines. Thereafter, FinCen issued extensions of filing obligations, the earliest requirement being January 13, 2025. The December 26 decision of the entire Fifth Circuit Court of Appeals overturned the December 23 three judge panel and reinstated the December 3 nationwide injunction.
Will the Filing Obligations Return?
The flip flopping that occurred this week is evidence that the future of the CTA is uncertain. Ultimately, a decision on the merits of the case – whether the CTA is constitutional – will be decided. The injunction may or may not remain in place until that ultimate decision.
What Should Reporting Companies Do Now?
The best thing reporting companies can do now is stay informed. Some companies may choose to continue conducting analysis, collecting information required by the CTA, and even continuing with filing. FinCen will continue to accept voluntary filings while the injunction is in effect.
Carmody will continue to track this ongoing litigation and keep you informed.
If you have any questions, do not hesitate to contact a member of our Corporate & Business team.
This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.