By: William L. Bricker, Jr.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas, issued an order granting a nationwide preliminary injunction for FinCEN Corporate Transparency Act ("CTA) reporting in the Texas Top Cop Shop, Inc. v. Garland case. The decision explicitly enjoined the CTA reporting nationwide, finding that “[a] nationwide injunction is appropriate in this case” with the result that “[existing] reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline.” Consequently, FinCEN could not enforce any of the CTA’s penalties for willful noncompliance against entities or individuals.
As we reported on December 24, 2024. FinCEN CTA reporting was reinstituted by a decision of the Federal Court of Appeals for the Fifth Circuit on December 23, 2024, in Texas Top Cop Shop, Inc. v. Garland. Within hours of the Court of Appeals decision, FinCEN announced that most reporting entities and individuals must now report under the CTA by January 13, 2025, some 3 weeks after the decision and one week before January 20, 2025, Inauguration Day.
On December 26, 2024, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024, order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.
Today [December 27, 2024] FinCEN issued an alert stating that “as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.
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