In the longest running game of legal pong in years in the United States, the Supreme Court entered the fray in the battle over enforceability of the Corporate Transparency Act (CTA) requirements on disclosure of ownership with FinCEN. On January 23, 2025, The Supreme Court issued a stay of the trial court’s nationwide preliminary injunction in the case of Texas Top Cop Shop, Inc. v. McHenry.

Regular readers will remember that the trial court granted the injunction. Then the injunction was stopped by the 5^th Circuit. Then the 5^th Circuit changed its mind and vacated its earlier ruling. Now, the Supreme Court weighs in and we are back to no current injunction in the Texas Top Cop Shop, Inc. case until the 5^th Circuit makes a final ruling. However, the nationwide injunction issued by a different federal judge does remain in place (see FinCEN’s discussion below), meaning CTA disclosure requirements are still stayed, despite the Supreme Court’s decision.

Meanwhile, FinCEN has issued additional guidance that it will continue to not enforce BOIR reporting requirements for the time being but will allow voluntary filings. FinCEN states:

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.

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On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

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So, the court’s order in the Smith case means there still is no mandatory BOIR filing necessary for the time being. Who knows what will happen in that case? Who knows what will happen in the 5^th Circuit? And, who knows what will happen in the Supreme Court, where the case seems likely to end up again. This story has been incredibly unpredictable and likely will continue on the same shifting trajectory until final resolution.

We will continue to provide you with updates regarding the status of the CTA and its reporting requirements. If you have questions about the CTA’s requirements or just want to ensure your business is on the right track, please feel free to reach out to Timothy Hughes, at (703) 526-5582 or thughes@beankinney.com, or Doug Taylor, at rdougtaylor@beankinney.com or (703) 525-4000. Our firm practices in Virginia, Maryland, and the District of Columbia in addition to various other jurisdictions and can help you through this process.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.