Injunction Temporarily Blocks Enforcement of Corporate Transparency Act BOI Reporting Requirement

30 Dec

Corporate Transparency Act: Injunction Back in Place

Updated: December 30, 2024

On December 26, 2025, the 5th Circuit issued a new order which effectively reinstated a nationwide preliminary injunction. It is important to note that the injunction is temporary and is pending further court action. This means that currently businesses do not have to file, but this could change any day. Accordingly, we are still recommending clients proceed with filing to ensure compliance with the CTA. Filing is the safest and most proactive route, especially businesses with complex reporting or multiple entities. It may take some time to gather and file the report, and there is no guarantee reports would be filed timely if the injunction is overturned

Here’s a more detailed summary from FinCen (https://fincen.gov/boi):

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

The Corporate Transparency Act (CTA) plays a vital role in protecting the U.S. and international financial systems, as well as people across the country, from illicit finance threats like terrorist financing, drug trafficking, and money laundering. The CTA levels the playing field for tens of millions of law-abiding small businesses across the United States and makes it harder for bad actors to exploit loopholes in order to gain an unfair advantage.

On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction. Texas Top Cop Shop is only one of several cases that have challenged the Corporate Transparency Act (CTA) pending before courts around the country. Several district courts have denied requests to enjoin the CTA, ruling in favor of the Department of the Treasury. The government continues to believe—consistent with the conclusions of the U.S. District Courts for the Eastern District of Virginia and the District of Oregon—that the CTA is constitutional. For that reason, the Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024 and separately sought of stay of the injunction pending that appeal.

On December 23, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit granted a stay of the district court’s preliminary injunction entered in the case of Texas Top Cop Shop, Inc. v. Garland, pending the outcome of the Department of the Treasury’s ongoing appeal of the district court’s order. FinCEN immediately issued an alert notifying the public of this ruling, and recognizing that reporting companies may have needed additional time to comply with beneficial ownership reporting requirements, FinCEN extended reporting deadlines. On December 26, 2024, however, a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the Court’s December 23, 2024 order granting a stay of the preliminary injunction. Accordingly, as of December 26, 2024, the injunction issued by the district court in Texas Top Cop Shop, Inc. v. Garland is in effect and reporting companies are not currently required to file beneficial ownership information with FinCEN.

Schloemer Law Firm, S.C. has been in the business of helping Wisconsin businesses with all of their legal needs for over 95 years. We frequently assist Wisconsin businesses throughout the state, and specifically in the areas of Washington County, Dodge County, Ozaukee County, Fond du lac County, West Bend, Hartford, Slinger, Fond du Lac, Sheboygan, Menomonee Falls, and surrounding areas.