Author: Dean Smith (PhD, CFP, TEP, CPA, CA, RWM; Partner)
CTA – The Saga Continues – Part 2
Just when you thought you could take a few days off and enjoy the holiday season but no..
It looks like the CTA is off again and appears to be so until late March 2025, if not longer.
On December 26, 2024, the U.S. Court of Appeals for the Fifth Circuit vacated its previous order granting a stay of the nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 24-40792 (5th Cir.). This order reinstates the nationwide preliminary injunction and once again temporarily enjoins enforcement of the Corporate Transparency Act (CTA) and the Beneficial Ownership Information (BOI) reporting requirements.
The December 26th ruling was by the full Fifth Circuit Court of Appeals. The prior December 23rd ruling was by a 3 judge-panel of the Court.
The Fifth Circuit Court of Appeals currently has 17 active judgeships and is based out of New Orleans, LA. It has appellate jurisdiction over the U.S. District Courts in Louisiana, Mississippi and Texas.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) confirmed in its subsequent statement that “reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force.”
On December 27, 2024, the Fifth Circuit set an expedited briefing schedule and scheduled oral arguments on March 25, 2025.
Litigation over the Corporate Transparency Act is now working its way through four of the federal appeals courts. The injunction by Judge Mazzant was the first to pause the enforcement of the law across the country.
“I think this case is almost certainly going to the Supreme Court, either now or in the future,” said Caleb Kruckenberg of the Center for Individual Rights, one of the lawyers representing the plaintiffs.
FinCEN has estimated that 32.6 million companies would need to register under the law; Mr. Kruckenberg said the number of individuals affected would be at least three times that number.
As the saga continues to unfold, we will keep our readers abreast of new developments.
