On Wednesday, December 3, a federal judge in Texas issued a ruling that temporarily suspends enforcement of the Corporate Transparency Act (CTA) nationwide. This is not a repeal but a temporary stay of enforcement.
At FincenFetch, we are committed to closely monitoring developments that could impact the CTA and our services. Our goal is to provide our customers with accurate and timely details to assist in guiding their operations.
This case has similarities to the Alabama ruling in March, where the stay of enforcement applied only to a small group of companies. In that instance, the Department of Justice (DOJ) filed an appeal within a week of the ruling.
Federal judges have the authority to issue injunctions either to small groups or on a national scale. Due to the national implications of this Texas ruling, it is anticipated that the DOJ will file an appeal to temporarily lift the stay, likely at a similar speed as the Alabama case. Historically, appellate courts address such rulings quickly, often resolving them within weeks to months.
While the outcome of the appeal remains uncertain, the CTA’s purpose as a national defense tool and its resilience in previous legal challenges suggest a repeal is unlikely. For example, cases such as Firestone v. FinCEN in Oregon (September) and the CAI case in Virginia (October) failed to lead to injunctions.
Here are some important points to know while awaiting further developments:
- No Penalties for Non-Compliance: As of now, FinCEN cannot enforce penalties. Businesses can choose to continue filing reports or allow clients to wait for a resolution to this injunction.
- FincenFetch Services Uninterrupted: As in previous cases, FincenFetch will continue to provide Beneficial Ownership Information (BOI) filing solutions and operate as usual until the CTA’s constitutionality is definitively resolved.
- Commitment to Updates: We are dedicated to keeping our customers informed with relevant updates for themselves and their clients.
Should this issue extend into January, it remains uncertain whether FinCEN will proactively adjust the compliance deadline. We are closely monitoring developments, including the anticipated DOJ appeal and subsequent court actions.
Please note, this situation is still evolving. More information is expected only when FinCEN provides an update or files the appeal. We will share further updates as they become available.
For any questions or concerns, feel free to reach out to our team. We are here to support you through these changes.
