On December 23, 2024, the United States Court of Appeals for the Fifth Circuit (the “Court of Appeals”) stayed (the “Stay”) a preliminary injunction (the “Preliminary Injunction”) that had halted the enforcement of the Corporate Transparency Act (the “CTA”), which is enforced by the United States Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).
The Preliminary Injunction had been entered on December 3, 2024 by the United States District Court for the Eastern District of Texas (the “District Court”) blocking the enforcement of the reporting requirements under the CTA. The Preliminary Injunction was applicable nationwide.
The United States Department of Justice appealed the Preliminary Injunction to the Court of Appeals. The Court of Appeals issued the Stay of the Preliminary Injunction, finding that, among other things, the government had made a preliminary showing that the CTA is constitutional. As a result, the filing requirements and deadlines under the CTA are revived.
However, in recognition of the ongoing litigation, FinCEN has announced certain filing extensions including, for example, extending the January 1, 2025 filing deadline to January 13, 2025 for companies formed prior to January 1, 2024.
This is a rapidly evolving situation. The Stay may be appealed to the United States Supreme Court or subject to further proceedings in the Court of Appeals. In parallel, the proceedings before the District Court on the merits of the challenge to the reporting requirements under the CTA are ongoing. In addition, legislative efforts are under way in Congress to postpone the January 1, 2025 deadline further. It is unclear whether such efforts will be successful prior to the deadline.
LimNexus will continue to monitor this and other matters for relevant CTA developments.
Firm Contacts
For assistance with any CTA related inquiries please contact any of the following LimNexus attorneys: