CORPORATE TRANSPARENCY ACT STILL ON HOLD as of February 7, 2025:
TL;DR: The government has included a PROPOSED order with a Motion to Stay pending appeal of the injunction in Smith et al v. U.S. Department of the Treasury, 6:24-cv-00336 (E.D. Tex.). That order has not been signed, but stay tuned. It could be at any moment given the SCOTUS decision in the Texas Top Cop Shop case. The motion to which that proposed order is attached states, “If the stay is granted, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) intends to extend the Corporate Transparency Act (CTA) compliance deadline for thirty days. During that period, FinCEN will assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities while prioritizing enforcement to address the most significant risks to U.S. national security. Staying the grant of preliminary relief will help facilitate that process.”
MORE INFO: I’ve been posting frequently as consequential developments occurred, first and mostly in connection with Texas Top Cop Shop, Inc. v. Garland, 4:24-cv-00478 and more recently in connection with Smith. The action in Texas Top Cop Shop was fast and furious for a while (over the holidays – thanks guys), ultimately resulting in SCOTUS lifting the nationwide injunction on enforcement of the CTA originally issued by the district court in that case. Despite that, as of today, February 7, 2025, filing remains voluntary due to another nationwide injunction, also issued by the U.S. District in the Eastern District of Texas. I noted on January 23, 2025 that injunction may meet the same fate as that in Texas Top Cop Shop. On February 5, 2025, the government pressed the matter by filing in the Smith case a Notice of Appeal and Motion to Stay with the proposed order discussed above. That in junction now heads to the same Fifth Circuit Court of Appeals that previously reversed, and then reinstated the Texas Top Cop Shop injunction. Given the Supreme Court’s ruling in Texas Top Cop Shop, it will be interesting to see how the Court of Appeals will rule this time.
Below is a summary of the events since the 12/3/2024 nationwide injunction original came down in the Texas Top Cop Shop case:
- 12/6/2024: The government appealed the preliminary injunction in Texas Top Cop Shop.
- 12/23/2024 The Motions Panel of the Fifth Circuit Court of Appeals GRANTED the government’s motion to stay the injunction issued December 3, 2024 in Texas Top Cop Shop, Inc. v. Garland. This was the only court action reinstating, ever so briefly, enforcement of the CTA. This triggered FinCEN to post extended deadlines.
- 12/26/2024: The Merits Panel of the Fifth Circuit Court of Appeals vacated the portion of the Motions Panel’s Order granting the stay of the 12/3 injunction, putting CTA on hold nationwide once again, where it remains as of this writing.
- 12/31/2024: DOJ filed application with SCOTUS to lift the injunction.
- 1/7/2025: The U.S. District in the Eastern District of Texas issued another nationwide injunction of CTA Smith et al v U.S. Department of the Treasury.
- 1/23/2025: SCOTUS lifted the nationwide injunction in Texas Top Cop Shop and did not directly address any other case, including Smith.
- 2/5/2025: Government files Notice of Appeal and Motion to Stay with the proposed order in Smith.