What Business Owners Need to Know About the Latest CTA Developments
Just when we thought the Corporate Transparency Act (CTA) was on hold, the legal landscape has shifted again. The national injunction preventing enforcement of the CTA, issued by the Smith court, has been lifted. This means beneficial ownership information (BOI) reporting is back as well.
While the Supreme Court lifted the national injunction in the Texas Top Cop Shop case on January 23, FinCEN explained that enforcement remained paused due to a separate injunction in Smith. That pause is now over, and business owners need to be prepared for what comes next.
What Happens Now?
With the Smith injunction lifted, we‘re waiting on FinCEN’s official response as of this writing. The author expects that we will recieve such within the next 24 hours and FinCEN will clarify how long businesses (reporting companies) have to complete their initial CTA filings. This means compliance deadlines could be moving fast—it is advisable to stay alert.
Meanwhile, several key legal challenges and legislative efforts could impact enforcement:
11th Circuit Case: The National Small Business United case is still pending before the 11th Circuit.
5th Circuit Case: Texas Top Cop Shop is scheduled for oral arguments in the 5th Circuit in March 2025.
Potential Legislative Delay: A bill that would provide a one-year delay for pre-2024 entities has passed the House and is awaiting Senate action.
Key Takeaways for Business Owners
1. Prepare to File Soon: With the Smith injunction lifted, FinCEN may resume enforcement quickly. If you haven’t filed your initial BOI report, be ready.
2. Stay Informed: Pending court cases and legislation could alter deadlines or even the CTA’s enforceability. Keep an eye on updates from FinCEN and legal developments.
3. Don’t Assume the CTA is Gone: While legal challenges continue, it’s risky to assume the CTA won’t be enforced. Preparation is the safest path for now.
4. Work with Legal and Compliance Professionals: Given the uncertainty, having a strategy in place for BOI reporting is crucial. If you’re unsure about your filing obligations or concerned about privacy, seek legal guidance.
Get in touch today.
Final Thoughts
The CTA remains a moving target, but the latest court action suggests enforcement will resume soon. Business owners should act proactively while staying tuned for further developments. There’s never a dull moment in compliance, and this is a prime example of why staying ahead of regulatory changes is critical.
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