On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA), questioning its constitutionality and its impact on small businesses.
Is the Corporate Transparency Act (CTA) dead?
No. The law is still in effect. The enforcement of the law and associated penalties are temporarily lifted. BOI Reporting is still required as part of the CTA.
What does this mean?
One question we are asked frequently is, “What happens if I don’t file my BOI Report on time? Will the federal government enforce penalties against me?” This ruling temporarily answers that question. For the time being, the preliminary injunction prevents the federal government from enforcing penalties for companies out of compliance with CTA.
What happens now?
The federal government will certainly file an appeal (and most likely an emergency appeal based on the looming deadlines) and ask for a stay (overturn) of the injunction. This court case (along with others) will most likely end up on the desk of the Supreme Court at some point in the future.
We are advising small business owners to continue to file their BOI Reports despite this temporary injunction, as the law remains in effect. A preliminary injunction against enforcement of the law does not mean that the law itself was repealed. There’s a possibility that an emergency appeal by the federal government gets approved, and if a business isn’t compliant with the CTA, it could face the associated penalties.
You can file at www.fincen.gov/boi
To see more specifics about the requirement please refer to our prior newsletters that can be
accessed on our website under the news tab.
