In a ruling issued at approximately 1:30pm EST on December 23, 2024, the United States Court of Appeals for the Fifth Circuit reinstated the January 1, 2025 compliance deadline set by the Corporate Transparency Act (the “CTA”). This means that, unless further challenges succeed in staying the deadline, reporting companies in existence as of January 1, 2024 must file their reports no later than January 1, 2025.
As earlier reported, FOS has been actively monitoring multiple lawsuits challenging the upcoming deadline since the CTA went into effect on January 1, 2024. https://foslaw.com/corporate-transparency-acts-january-1-2025-deadline-fast-approaching-for-entities-formed-before-january-1-2024/; https://foslaw.com/wp-content/uploads/2023/12/Winter-2023-Client-Newsletter.pdf. Earlier this month, FOS reported on the Eastern District of Texas’s action blocking enforcement of the CTA filing deadlines nationwide. https://foslaw.com/update-federal-court-blocks-corporate-transparency-act-enforcement-nationwide/.
The Fifth Circuit rejected the Eastern District of Texas’s conclusions that the plaintiffs met their burden for a preliminary injunction barring enforcement of the CTA. Instead, the Fifth Circuit concluded that the government “made a strong showing that it is likely to succeed on the merits in defending the CTA’s constitutionality,” that enjoining the statute enacted by elected representatives “necessarily inflicts irreparable harm,” that compliance with the CTA enacts minimal harm on the plaintiffs and, finally, that there is an “urgent interest in combatting financial crime and protecting our country’s national security.” The Fifth Circuit has further set the appeal for expedited oral arguments.
Unfortunately, this means that those businesses who delayed making their CTA filings (understandably so, in light of the December 3rd preliminary injunction) must now work to comply with the January 1, 2025 filing deadline. This continues to be a frustrating and rapidly evolving situation. It is possible that another circuit, or the U.S. Supreme Court, could provide relief. Absent other court orders, or further guidance from FinCEN extending any filing deadlines, the January 1, 2025 deadline stands.
While businesses are caught in the back and forth of challenges to the CTA, FOS will continue to monitor and update clients as developments happen. If you have any questions about the CTA, or the impact on the Fifth Circuit Court of Appeals’ ruling on your business, contact your FOS attorney.
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