Corporate Transparency Act is Once Again Voluntary

December 26, 2024

Claire Brown, Jessica Morgan, and Kate Roth - Tonkon Torp LLP

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Subject to further changes, the Corporate Transparency Act is once again voluntary. Reporting obligations under the Corporate Transparency Act (“CTA”) are currently voluntary pursuant to a preliminary injunction imposed by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop v. Garland. 

Over the past three weeks, the effectiveness of the CTA and its reporting obligations have been at the mercy of the federal courts. On December 3, the U.S. District Court for the Eastern District of Texas enjoined the reporting obligations for reporting companies nationwide, a move it later upheld on December 16. In an appeal to the Fifth Circuit Court of Appeals, the government prevailed on its motion to stay the injunction of the lower court, making the reporting obligations mandatory as of December 23. FinCEN responded by providing extended deadlines into January 2025. Yesterday, December 26, a separate panel of Fifth Circuit Court of Appeals reversed the December 23 order lifting the preliminary injunction.

We will continue to monitor updates affecting the effectiveness of the CTA and the pending litigation, and provide updates as they become available. Although voluntary, we encourage business to continue complying with the CTA until the law is finally settled in this area. Please contact us if you have any questions.

Further information is available here https://www.fincen.gov/boi (see Alerts).

This update is prepared for the general information of our clients and friends. It should not be regarded as legal advice. If you have questions about the issues raised here, please contact Claire Brown, Jessica Morgan, Kate Roth or the attorney with whom you normally consult.

About Tonkon Torp
Tonkon Torp LLP is a leading business and litigation law firm serving public companies, substantial private enterprises, entrepreneurial businesses, and individuals throughout the Northwest. Tonkon Torp is celebrating its 50th year in business! See our History Timeline for more information, or visit tonkon.com.