On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, issued an interim final rule (the “Interim Rule”) under the Corporate Transparency Act (“CTA”) whereby it (i) significantly revised the statutory definition of “reporting company”, (ii) exempts domestic entities from beneficial ownership reporting requirements, (iii) limits the scope of the CTA to non-U.S. persons, i.e., entities formed under the laws of a foreign country and that are registered to do business in any state or tribal jurisdiction in the United States, and (iv) adds an exemption from reporting, as discussed below, by moving the term “domestic reporting company” to a new exemption.  

On March 2, 2025, the U.S. Department of the Treasury  (“Treasury”) announced that it will not impose penalties, fines, or pursue enforcement actions against U.S. companies, citizens, or their beneficial owners for failing to file beneficial ownership information (“BOI”) reports, pursuant to the Beneficial Ownership Information Reporting Requirements final rule (31 C.F.R. 1010.380) (the “Reporting Rule”), the Corporate Transparency Act (“CTA”) (31 U.S.C. § 5336), even after any forthcoming deadline extensions or changes to the Reporting Rule. Treasury’s announcement follows earlier guidance from the Financial Crimes Enforcement Network (FinCEN) (the Treasury bureau responsible for enforcing the CTA)—which suspended enforcement of the March 21, 2025, filing deadline.
 

On February 17, 2025, the U.S. District Court for the Eastern District of Texas lifted the last remaining nationwide injunction against enforcement of the Corporate Transparency Act (CTA) previously issued in Smith v. US Dep’t of the Treasury, clearing the way for the law’s implementation. This marks a significant development following the U.S. Supreme Court’s January 23, 2025, order in McHenry v. Texas Top Cop Shop, Inc., which lifted a separate nationwide injunction issued by another Texas federal district court. However, due to delays in the Justice Department’s motion in Smith, the CTA’s implementation remained blocked nationwide until now.

The ongoing legal saga in the federal courts surrounding the Corporate Transparency Act (CTA) (31 U.S.C. § 5336) has reversed course, yet again.  

On December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted the government’s emergency motion for a temporary stay of a district court’s order and nationwide injunction against the Corporate Transparency Act (CTA) and its corresponding Beneficial Ownership Information (BOI) Reporting Rule.

Following a Texas federal district court’s issuance of a nationwide injunction temporarily halting enforcement of the Corporate Transparency Act (“CTA”), the U.S. government has filed an appeal with the U.S. Court of Appeals for the Fifth Circuit, challenging the district court’s findings (found here). In response to both the national injunction and the appeal, the Financial Crimes Enforcement Network (“FinCEN”), the agency responsible for enforcing the CTA, issued guidance (found here) clarifying that reporting companies are not currently required to file beneficial ownership information (“BOI”) reports and will not face liability for noncompliance “while the preliminary injunction remains in effect.”

On December 3, 2024, the U.S. District Court for the Eastern District of Texas, Texas Top Cop Shop, Inc. v. Merrick Garland (Civil Action No. 4:24-CV-478), issued a memorandum opinion and order granting a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (“CTA”) and its implementing regulations and staying the compliance deadline for reporting companies pending further order of the court.

On March 1, 2024, the U.S. District Court for the Northern District of Alabama in National Small Business United et al.  v. Janet Yellen et. al., Case No. 5:22-cv-1448-LCB,  held the Corporate Transparency Act (the “CTA”) to be unconstitutional. In this surprising decision, U.S. District Court Judge Liles C. Burke ruled “The CTA is unconstitutional because it cannot be justified as exercise of Congress’ enumerated powers.”