On January 23, 2025, the United States Supreme Court issued a stay with respect to the injunction against enforcement of the Corporate Transparency Act. However, on the morning of January 24, 2025, FinCEN announced that a Texas US district court in the case of Smith v. U.S. Department of the Treasury issued a similar injunction on January 7, 2025.
The FinCEN website now states the following:
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.
On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop.
Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
Next Steps
Because the current pause in enforcement is only temporary pending the outcome of several court cases, reporting companies should either proceed with their filings, or at least continue to gather required information for filing so that if the courts order filings to recommence, they will be ready to file within a short time frame.
Reporting companies and their owners should consult with counsel to ensure that they are in compliance with the latest requirements of the Corporate Transparency Act. Gallagher & Kennedy attorneys are prepared to assist you with this process.
Click here to read the Supreme Court's January 23, 2025, decision.
Click here to read the Texas court's January 7, 2025, decision.
About the Author
Otto Shill helps individuals, business owners, and employers comply with and plan for laws and regulations related to federal and state taxation, employee benefits, and executive compensation. He assists clients with audits, investigations, and regulatory disputes related to these areas and advises business owners on various transactions and long-term succession and estate planning.
Recognized as a Certified Tax Specialist by the State Bar of Arizona's Board of Legal Specialization, Otto earned his LL.M. in taxation from Boston University and his J.D. and B.S. in accounting from Brigham Young University. He is admitted to practice before all state and federal courts in Arizona, the U.S. Tax Court, the U.S. Court of Federal Claims, the U.S. Court of Appeals for the District of Columbia, and the U.S. Supreme Court.