Corporate Transparency Act Updates: Fifth Circuit Vacates Stay and Preliminary Injunction
Recently, there have been some developments regarding the enforcement of the Corporate Transparency Act (CTA). On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction on the enforcement of the CTA and its reporting obligations. However, on December 23, 2024, the U.S. Court of Appeals for the Fifth Circuit granted a stay of the preliminary injunction.
Following the Fifth Circuit’s decision, the Financial Crimes Enforcement Network (FinCEN) announced an extension to the CTA year-end reporting deadline to January 13, 2025. But things took another turn on December 26, 2024, when the Fifth Circuit vacated their stay of the preliminary injunction in anticipation of a quick ruling on the merits of the injunction.
While FinCEN has not yet issued a statement on this latest development, it is expected that they will comply with the injunction, as they did previously, while still allowing reporting companies to voluntarily submit reports. Given the ongoing uncertainty, it is advisable for entities to continue preparing their CTA reports and be ready to file on short notice if the preliminary injunction is once again stayed or overturned.
These changes have created a bit of a rollercoaster ride for businesses affected by the CTA, but staying informed and prepared is key. It’s important to keep a close eye on any updates and be ready to act accordingly.