Media Center

February 20, 2025
Publications

Texas Federal Court Reinstates the Corporate Transparency Act
The U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., has lifted the “pause” on the Corporate Transparency Act (CTA) beneficial ownership reporting requirements. The ruling in Smith reverses the previous nationwide injunction against enforcement of the CTA, issued on January 7, 2025. It grants the federal government’s stay of the injunction, which reinstates the CTA reporting obligations, as defined under the CTA (31 U.S.C. § 5336). As a result of Smith, businesses are once again subject to mandatory reporting obligations as outlined in the CTA.

FinCEN Delays CTA Compliance Until March 21, 2025
Following the ruling, the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance effectively extending the CTA reporting deadlines. In its guidance, FinCEN has delayed the reporting obligations until March 21, 2025, for most reporting companies. FinCEN also signaled it would provide more updates as the new deadline approaches, recognizing that some companies may need additional time to comply. Any reporting companies who were previously given a later deadline, such as those qualifying for disaster relief, must still comply with that later deadline, not the March 21, 2025, deadline. CTA beneficial ownership information reports can be filed at FinCEN.gov/boi.

Next Steps
The ruling in Smith reinstating reporting obligations has not put an end to other ongoing litigation and proposed legislative amendments related to the CTA. On February 10, 2025, the United States House of Representatives unanimously voted to delay CTA compliance until January 1, 2026. However, the United States Senate has not taken up the amendment. Another bill was introduced to repeal the CTA, but no action has been taken on this legislation to date.

Meanwhile, other federal district courts across the United States have all denied plaintiffs requests for injunctions taking aim at the CTA. The Fifth Circuit Court of Appeals, which previously issued an injunction to prevent enforcement of the CTA that was lifted by the Supreme Court, is set to hear Oral Arguments in Texas Top Cop Shop, Inc. et al. v. Garland et al. on April 1, 2025.

Despite pending appeals across the country, reporting companies should consult legal counsel and begin preparing to file beneficial ownership reports before their respective deadlines.

© 2025 McNees Wallace & Nurick LLC
McNees Client Alert is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.