December 30, 2024

For those who have been following the court room drama involving the Corporate Transparency Act (CTA) over the last few weeks, you may have some festive whiplash. For everyone else who has been enjoying some much-needed peace during the holiday season, here is the bottom line: There is -once again- a Federal Court injunction against the enforcement of the CTA. This means that companies may still file their Beneficiary Ownership Reports, but the government is barred from imposing fines or prosecuting those who do not. 

If you are interested in finding out more about how we got to this point, here is a condensed timeline of the case. 

Dec. 3, 2024. The U.S. District Court for the Eastern District of Texas entered an order enjoining enforcement of the CTA and its corresponding Reporting Rule. 

Dec. 5, 2024. The government appealed. 

Dec. 23, 2024. A motions panel of the Fifth Circuit granted the government’s emergency motion for a stay pending appeal. This reinstated the BOI Reporting requirement. Later that day, FinCEN released a statement postponing most reporting deadlines for a short period of time. 

Dec. 26, 2024. The Fifth Circuit vacated the relevant part order granting the stay. In other words, they reinstated the original December 3rd injunction. 

While this injunction suspends the immediate legal obligation to file Beneficial Ownership Information (BOI) reports, our firm’s professional opinion is that it remains prudent to proceed with reporting. This approach ensures you are prepared should the injunction be lifted (again) and compliance deadlines reinstated. We should reiterate that the preliminary injunction is, by nature, “preliminary” and, particularly, after the last few weeks, it would be unwise to make any predictions in this case, even by those of us who are following it closely. The appeal is still pending, and the injunction could potentially be overturned. Finally, the change of administration and Congressional influence in 2025, could spell further uncertainty beyond the courtroom. 

As of December 27th, 2024, FinCEN is still accepting BOI Reports. It will be up to each individual business owner to determine if they wish to wait for the outcome of this case or to simply file to avoid missing yet another development in this matter. We remain committed to providing you with informed and proactive guidance. If you have any questions about this development or would like to discuss the CTA implications further, please don’t hesitate to contact Omni360.

By: Siobhan Kinealy, Esq – Trusts & Estate Planning Attorney