Fifth Circuit Reverses CTA Decision and Reinstates Nationwide Stay

On December 23, 2024, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit reversed a Texas district court order from the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al. that had initially granted a preliminary injunction of the enforcement of the CTA. The Circuit Court’s order temporarily lifted the hold on the enforcement of the Corporate Transparency Act (“CTA”) and its Beneficial Ownership Information Report (“BOIR”) filing obligations.

The Financial Crimes Enforcement Network (“FinCEN”) released a statement within hours of the release of the Fifth Circuit's decision, extending the applicable filing deadlines. For reporting companies formed prior to 2024 or entities formed after September 4, 2024, with original filing deadlines between December 3, 2024, and December 23, 2024, the new filing deadline is January 13, 2025.

However, on December 26, 2024, the full Fifth Circuit Court reversed the three-judge panel, reinstated the stay, and again halted the enforcement of the CTA nationwide, while the merits of the case are under expedited appellate review. As a result, reporting companies are once more relieved of their BOIR obligations and FinCEN’s new deadlines are no longer enforceable for the moment.

We understand that this ping pong game of judicial decisions is confusing and certainly causes uncertainty. We are closely monitoring the situation and will continue to keep you informed of any new developments or guidance from FinCEN or the courts through the ever-changing landscape of CTA enforcement.

If you have any questions or need assistance with the CTA compliance, please contact our CTA Task Force by calling our offices at (516) 599-0888 or messaging Jim Black (jblack@frblaw.com) or Alexander Migliorini (amigliorini@frblaw.com).