As our clients know, FOS has been actively monitoring cases challenging the Corporate Transparency Act (CTA) and updating clients on resulting CTA reporting obligations.
FOS’s last client alert, issued less than a month ago, recounted that the U.S. Supreme Court in Texas Top Cop Shop v. McHenry, as a practical matter, ended the stay of reporting requirements which had been issued while that case’s appeal to the Fifth Circuit is pending. Despite this, the Financial Crimes Enforcement Network (FinCEN) stated that reporting companies were not required to file beneficial ownership information with FinCEN, because a separate Texas district court, in Smith v. U.S. Department of the Treasury, had stayed the CTA reporting requirements nationwide. https://foslaw.com/no-cta-reporting-requirements-despite-supreme-courts-order/
Well, there may be no rest for weary CTA followers. On February 17, 2025, the Smith court, as a practical matter, released its prior stay (it technically stayed its prior preliminary injunction), based on the Supreme Court’s action in Texas Top Cop Shop.
This means that, in another topsy turvy turn, CTA reporting requirements are back on.
Responding to the Smith order, FinCEN issued a statement recognizing that reporting companies would need additional time to comply with their reporting obligations. It extended the reporting deadline for most businesses until March 21, 2025. Companies formed or registered on or after February 18, 2025 must report within 30 days from creation or registration.
FinCEN’s statement provided that it will provide “an update” before March 21, 2025 “of any further modification of” the reporting deadline. It also acknowledged that reporting companies may need additional time to comply “once this update is provided.”
So, what should reporting companies do?
Companies should prepare for a March 21, 2025 filing date, since no one (maybe including FinCEN) knows what the substance of or timing under the update will be. At the same time, companies should be on the lookout for additional notices from FinCEN, which will hopefully clarify and set a feasible action/reporting plan.
FOS will continue to monitor the CTA and reporting obligations. If you have any questions, contact your FOS attorney.
Image: Gettyimages
