On December 26, 2024, three days after reinstituting the mandates of the Corporate Transparency Act (CTA), the Fifth Circuit Court of Appeals reversed its decision. The court previously granted the government’s motion to stay the preliminary injunction issued in Texas Top Cop Shop, Inc., et al. v. Garland, et al.,[i] which for a short period reinitiated the mandates for small businesses to file Beneficial Ownership Information (BOI) Reports. The reversal of course by the court now vacates the court’s prior ruling, which means that the nationwide enjoinment over the CTA is back in place. In response to the court’s latest ruling, the Financial Crimes Enforcement Network (FinCEN) posted the following alert:
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.
Given the instability in connection with the reporting obligations under the CTA, It’s important for small businesses to continue their preparedness in the event that the injunction is lifted (again), as the CTA provides harsh penalties for failure to comply with filing mandatory BOI Reports. The attorneys at O’Reilly Rancilio P.C. will continue to monitor matters regarding the CTA and are available to counsel clients on reporting and compliance requirements. Please don’t hesitate to contact Charles E. Turnbull at cturnbull@orlaw.com or Arvin F. Zora at azora@orlaw.com if you have any questions.
[i] Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.).
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