Orloff, Lowenbach, Stifelman & Siegel’s Post

Interesting developments in the world of the Corporate Transparency Act.

While DC obsessed over must-pass year-end legislation, part of another must-pass Congressional compendium from 4 years ago, the Corporate Transparency Act, which imposed ownership disclosure regulations on over 30 million mostly small business entities, was enjoined by a federal court. It’s a reminder that for federal statutory enactments, being inserted into a 1,000-page legislative package is not the end but only the beginning.

Updates on Corporate Transparency Act (CTA) from Bob Jennings at TaxSpeaker. Alabama courts have been busy. On Friday March 1, 2024, the U.S. District Court for the District of Alabama declared the Corporate Transparency Act (CTA) unconstitutional. In the case of National Small Business Association v. Yellen (Case No. 5:22-cv-01448) [1], initiated by the National Small Business United, the challenge was against the CTA's mandate for small businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).   The ruling has the effect of suspending all BOI filing requirements for now, all enforcement actions, and all compliance concerns including questions of "practicing law without a license." Experts believe the ruling will be appealed, probably to the Supreme Court, so this is a temporary filing requirement suspension until a final appeal is exhausted. Voluntary filing appears to still be allowed if for some reason a client desires to file.

Breaking CTA News: Yesterday, a federal district court in Texas issued a decision temporarily preventing the enforcement of the Corporate Transparency Act (“CTA”).  The court found the CTA exceeded Congress’ power and enjoined the government from enforcing the CTA on a nationwide basis, expressly staying the January 1, 2025 reporting deadline.    The ruling freezes—for now—the CTA’s reporting requirements for all reporting companies. The injunction is preliminary and the ultimate fate of the CTA remains unsettled. The government likely will appeal the district court’s ruling.  For now, the Tucker Ellis CTA Task Force recommends to advise clients that they do not need to file any BOI reports with FinCEN pending further resolution on the case. However, they should be prepared for case updates, which may come at any time. #CTA #corporatetransparencyact #fincen

A Federal District Court held that the Corporate Transparency Act is unconstitutional, stating it “exceeds the Constitution’s limits on Congress’ power." The ban on the CTA's enforcement is limited to the NSBA and its 60,000+ members... Given the narrow nature of this summary judgment, unless the Treasury Department suspends enforcement of CTA for all 30+ million businesses that are obligated to file, CTA BOI reports will need to be filed by all of those tens of millions of businesses except for the less than 65,000 NSBA members to which the decision applies... Many believe that all reporting companies facing CTA deadlines should seriously consider filing, even if the Federal District Court's ruling covers them. Businesses that fail to file in time to meet their CTA deadlines are betting on the NSBA prevailing in the courts. Meanwhile, if the UST prevails, these businesses will potentially face significant civil fines, interest, and penalties, as well as possible criminal penalties, including jail time... https://lnkd.in/eJV-_eHh

For all small business owners: A controversial new law that requires reporting companies to report information to the U.S. government about who ultimately owns and controls them is dead—at least for now. A ruling out of the U.S. District Court for the Eastern District of Texas granted the plaintiffs a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) across the country. For more read on Forbes; https://lnkd.in/g2SR9H-f.

On March 1, 2024 a federal district court in Alabama ruled that the Corporate Transparency Act (CTA) is unconstitutional. The CTA, as implemented, requires certain entities to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The ruling permanently enjoined the government from enforcing the CTA – but only as to the plaintiffs to that case, specifically. This is not a nationwide injunction. While we suspect this may prompt litigation and precedent for other jurisdictions, FinCEN has made it clear that everyone else still must comply. Unless and until the United States Supreme Court or an Ohio federal court makes a similar ruling on the issue, entities subject to the CTA reporting requirements must comply. We will continue to follow this and provide updates on any new developments. To discuss how the CTA applies to your business, contact RCO Law at 419-249-7900, or go to the Firm website to learn more. https://lnkd.in/gtukX3Jh

This is a good update on the current legal situation of the Corporate Transparency Act.   “As the legal battle over the constitutionality of the CTA unfolds, family businesses must stay informed and prepared to adapt to the evolving regulatory environment. The outcome of this case could have lasting impacts on the transparency and regulatory requirements faced by family-owned enterprises across the nation.”   https://lnkd.in/dZiVZFbT

🚨 Urgent CTA Update: Reporting Rule Back in Effect 🚨 The legal landscape surrounding the Corporate Transparency Act has shifted again. On December 23, 2024, the Fifth Circuit Court of Appeals reinstated the CTA’s reporting rule, requiring most reporting companies to file beneficial ownership information. FinCEN has extended the filing deadline for most companies to January 13, 2025. Learn more about these critical changes and updated deadlines: https://lnkd.in/eHDiMRBs For ongoing updates and insights, visit Bridgeford’s CTA Resource Page: https://lnkd.in/exh4JTia #corporatetransparencyact #ctaupdate #compliance #fincen

Here is our most recent update on the Corporate Transparency Act