The Corporate Transparency Act is currently still in effect, until further notice.
While a lawsuit was filed in the Northern District of Alabama, and a judgment was entered in favor of the Plaintiffs finding the Corporate Transparency Act (CTA) unconstitutional, the trial court only entered an injunction against the Financial Crimes Enforcement Network (FinCEN) barring enforcement against those plaintiffs – the largest of which was the National Small Business Association. The injunction applies to their members. FinCEN has announced that it intends to continue to enforce the CTA against all others.
That case has been appealed and currently sits at the 11th Circuit Court of Appeals, case no. 24-10736. It has been fully briefed, and oral arguments were held on September 27, 2024. An order could be entered any day now.
For practical purposes, you should proceed as if the Corporate Transparency Act is still enforceable. Advise your clients that the CTA is still the law of the land. Even if the appeal to the 11th Circuit sustains the underlying judgment, there is no guarantee that a wider injunction will be imposed.
The CTA will almost certainly wind up at SCOTUS, which likely won’t even accept briefing until next year, after the reporting deadline. The grace period is through 12/31/2024. After that, companies have 30 days before fines are assessed. We’re already technically “past the deadline,” which went into effect 1/1/2024, but no fines can be assessed until 2025.
_______
Special thanks to contributor Tripp Watson, Entrepreneur Attorney, Intellectual Property Consulting, LLC
Comments