Update as of March 28th, 2025: Please refer to this article, Upcoming BOI Reporting Deadlines & Scam Alerts, for more updates.
Update: On January 23, 2025, the Supreme Court lifted the injunction in the Texas Top Cop Shop case, allowing the government to enforce the Corporate Transparency Act (CTA) while the case on its constitutionality continues. However, a separate nationwide injunction from another Texas court (Smith v. U.S. Department of the Treasury) remains in effect, and FinCEN has confirmed that reporting companies are still not required to file beneficial ownership information with FinCEN at this time. While filing remains voluntary, companies can choose to submit reports based on their risk tolerance.
A Texas federal court has issued a nationwide preliminary injunction halting enforcement of the Corporate Transparency Act (CTA). The court ruled that the law exceeds Congress’s constitutional authority under the Commerce Clause, asserting it serves law enforcement purposes rather than regulating commerce.
Key Implications of the Ruling:
- No Enforcement for Now: Unless or until a higher court overturns the injunction, no enforcement of the CTA can proceed and thus – as it stands now – FinCEN cannot impose penalties for noncompliance with Beneficial Ownership Information (BOI) reporting while the injunction remains in effect.
- Uncertain Future: This is a preliminary ruling and subject to appeal. The court may reconsider and (as we saw with a similar case in Alabama that imposed a narrower injunction on the parties to that suit) the government is expected to appeal this decision to the Fifth Circuit Court of Appeals with escalation to the U.S. Supreme Court possible.
- Consider Filing Anyway: Impacted businesses should still consider filing BOI reports, as the law could be reinstated if the injunction is overturned. Filing is free and can be completed online. More information can be found in our article here.
For now, compliance is not required, but businesses should remain informed as this case develops. If you have questions or need guidance, don’t hesitate to reach out. We’ll continue to provide updates as the situation evolves.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
