On December 26, 2024, the on-again, off-again saga of the reporting requirements for most small business owners under the Corporate Transparency Act (CTA) took another twist when the U.S. Court of Appeals for the Fifth Circuit decided to completely reverse direction. The Fifth Circuit vacated its December 23, 2024, Order that blocked the trial court’s national injunction blocking enforcement of the CTA in the case of Texas Top Cop Shop, Inc. v. Garland. The Fifth Circuit’s latest order from December 26 states:

[I]n order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

This takes us back to the national injunction being in place while the parties litigate at the Fifth Circuit. This casts some doubt over whether, or when, “reporting companies” will be required to file beneficial ownership information reports (BOIR) with FinCEN.  FinCEN has responded by clearly indicating on its website that filing requirements and penalties are held in abeyance while the nationwide injunction remains in effect.

Because there is really no clarity on what is likely to happen next, our recommendation at  this point is that businesses subject to the CTA’s reporting requirements should continue gathering information to be prepared to file a BOIR, in the event that the nationwide stay is lifted at some point in the Texas case.  While this is not currently legally required after the injunction, if the injunction is reversed, it is quite uncertain what will happen then. Given FinCEN’s earlier adjustment of the deadlines for filings, we believe it is likely there will be another adjustment if the BOIR filings come back to life. We do have to say that given the wild late twists and turns we have seen over the last month, it is really impossible to predict with certainty how this plays out. We are also left with total uncertainty over how the incoming Trump administration will respond when they take over.

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.