What You Need to Know About FinCEN Reporting and the Recent Nationwide Injunction

What You NeedWhat You Need to Know About the Corporate Transparency Act

The Corporate Transparency Act (CTA) is a game-changer for businesses in the U.S. It requires companies to disclose details about their owners to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). However, a recent court decision has thrown the future of this law into question. Here's a simplified breakdown of what you need to know about the CTA, the deadlines, and the impact of the court's nationwide injunction. 

What is the Corporate Transparency Act (CTA)? 

The CTA, part of the Anti-Money Laundering Act of 2020, aims to prevent criminals from using anonymous companies to engage in money laundering, terrorism financing, and tax fraud. To do this, it requires most U.S. businesses (called “reporting companies”) to submit information about their “beneficial owners” — the people who control or own 25% or more of the company. 

Not every company has to comply. Banks, public companies, and some larger private companies with over 20 employees are exempt. But for most small businesses, this rule applies. 

What Are the Reporting Deadlines? 

Companies formed before January 1, 2024, must submit their initial report to FinCEN by January 1, 2025. Companies formed in 2024 have 90 days after formation to file their reports. For companies formed after 2024, the deadline is even shorter — just 30 days. 

What Happened in Court?

Several plaintiffs have challenged the CTA's constitutionality, arguing that Congress didn’t have the authority to pass it. Four federal courts have weighed in, but they don’t all agree. 

The most significant decision came on December 3, 2024, when a judge in Texas (in the case Texas Top Cop Shop, Inc. v. Garland) ruled that Congress exceeded its authority under the Commerce Clause and issued a nationwide injunction. This ruling halts the enforcement of the CTA and its deadlines. 

Other courts — like those in Oregon and Virginia — ruled in favor of the CTA, while a court in Alabama agreed with Texas that the law is unconstitutional. All four cases are now on appeal, and the fight may ultimately reach the U.S. Supreme Court. 

What Does the Injunction Mean for Your Business? 

Right now, because of the nationwide injunction, the U.S. Treasury Department cannot enforce the CTA's reporting requirements. This means you do not need to file reports with FinCEN while the injunction is in place. 

But this could change quickly. The Department of Justice has appealed the injunction to the Fifth Circuit Court of Appeals and asked for the injunction to be paused. If that happens, businesses may be required to submit their reports on short notice. 

What Should Businesses Do Next?

1. Stay Informed: Follow updates on the appeals in Texas, Alabama, Oregon, and Virginia.  2. Be Prepared Even though reporting isn’t required now, the deadlines could return if the injunction is lifted. 

3. Consult an Attorney: If you’re unsure whether your business qualifies as a “reporting company” or need help understanding the filing process, legal guidance can save you time and money. 

Conclusion 

The future of the Corporate Transparency Act is uncertain. While a federal judge has stopped the reporting requirements for now, that decision is under appeal. If the appeals court or Supreme Court allows enforcement to resume, businesses will need to act fast to meet the deadlines. Stay prepared and stay informed. 

For more guidance on how the CTA affects your business, reach out to REBLAW for expert advice.

(CTA) anWhat You Need to Know About the Corporate Transparency Act

(CTA) and the Recent Nationwide Injunctiond the Recent Nationwide Injunction to Know About the Corporate Transparency Act

What You Need to Know About the Corporate Transparency Act

(CTA) and the Recent Nationwide Injunction

(CTA) and the Recent Nationwide Injunction