Status of CTA Reporting Rule as of January 24, 2025

FinCEN announced on January 24:

In light of a recent federal court order, 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. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

The litigation history of late has been dizzying:

• December 3, 2024: A US District Court judge (Eastern District of Texas) in the Texas Top Cop Shop case ruled the CTA unconstitutional and issued a nationwide preliminary injunction against its enforcement.
• December 23: On appeal of Texas Top Cop Shop, a 3-judge panel of the Fifth Circuit Court of Appeals lifted the lower court’s injunction, and FinCEN swiftly responded with new filing deadlines.
• December 26: A different Fifth Circuit panel in the Texas Top Cop Shop case overrode the earlier panel, reinstating the District Court’s injunction (and negating FinCEN’s new deadlines).
• January 7: A different US District Court, in the Smith v. U.S. Department of the Treasury case, ruled the CTA unconstitutional and issued a separate nationwide preliminary injunction against its enforcement.
• January 23: The US Supreme Court granted the Government’s motion to stay the Texas Top Cop Shop injunction, but without mention of the Smith v. U.S. Department of the Treasury injunction.
• January 24: FinCEN states that enforcement of the CTA reporting requirements is suspended for now, citing Smith v. U.S. Department of the Treasury.

Whether the Fifth Circuit issues a stay of the Smith v. U.S. Department of the Treasury preliminary injunction remains to be seen. Oral argument in Texas Top Cop Shop is presently scheduled for March 25, but of course that all is subject to change. Stay tuned.