CTA Blocked Again

You read the title of this Client Alert correctly—after the Fifth Circuit Court of Appeals lifted a nationwide injunction against the implementation of the Corporate Transparency Act’s reporting requirements on Monday, a different panel of the same Court came back from the Christmas holiday and reimplemented the injunction last night. The CTA’s reporting requirements are enjoined from enforcement on a nationwide basis. 

FinCEN’s website has yet to be updated to reflect the Court’s most recent ruling, but, for now at least, the CTA’s beneficial ownership information reports need not be filed. 

The litigation will proceed on an expedited basis. The ultimate resolution of both the preliminary injunction as well as the merits of the underlying litigation may result in one or more changes of course yet again.

While the CTA may be enjoined, the Court's December 23rd Order may provide insight on how enforcement will proceed if the Department of the Treasury is ultimately successful on the merits. There will likely be a very limited window of time to become compliant with the CTA. As such, while there is no current requirement to file under the CTA, reporting entities are permitted to voluntarily file while the litigation plays out to avoid any potential time constraints in the future.

We will continue to update you with any new developments. Please reach out to a MacDonald Illig attorney if you have any questions at 814-870-7600.

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