Compliance Chaos: Corporate Transparency Act Reporting Requirements as of January 24, 2025
February 13, 2025
By: Jay Phillips
Compliance Chaos: Corporate Transparency Act Reporting Requirements as of January 24, 2025
On January 23, 2025, the Supreme Court an Order granting an application for stay in Texas Top Cop Shop, Inc. v. McHenry (formerly Texas Top Cop Shop v. Garland), in a win for the Department of the Treasury. However, additional developments in other federal court cases continue to leave reporting companies navigating uncertain terrain regarding their obligations under FinCEN’s beneficial ownership reporting requirements.
In another case, a separate Order was issued by another federal judge in Smith v. U.S. Department of the Treasury which “Stays the effective date of the Reporting Rule (31 C.F.R. § 1010.380) while this lawsuit is pending.” As a result, reporting companies are not required to file beneficial ownership information with FinCEN, nor are they subject to liability for failing to do so while the Smith order stands (even in light of the Supreme Court’s Order in Top Cop).
This temporary reprieve continues to murky the waters for reporting companies. While the obligation to file has been paused, FinCEN continues to accept voluntary submissions of beneficial ownership information. Reporting companies should weigh their options carefully, balancing the potential benefits of voluntary compliance—such as demonstrating good faith and readiness for eventual compliance—with the potential risks or burdens of filing early.
Companies should also stay informed about further legal developments, as these court orders may shift again. It’s essential to maintain close communication with legal counsel to evaluate the implications of this evolving landscape and prepare for potential compliance requirements once the Smith order is lifted or additional guidance is issued.
For further information or assistance in understanding your obligations under the CTA, please contact our team. We are here to help you stay compliant in a rapidly changing regulatory environment.
Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Always consult with a qualified attorney for guidance tailored to your specific circumstances.