CTA Injunction and DOJ Appeal – What Now?
On December 5, 2024, the Department of Justice filed a notice of appeal with the Fifth Circuit Court of Appeals of the December 3rd order that preliminarily enjoins enforcement of the Corporate Transparency Act (CTA) on constitutional grounds. The U.S. Financial Crimes Enforcement Network (FinCEN) also posted a statement to its website regarding the court’s ruling and the appeal. While the preliminary injunction remains in effect, companies that would otherwise be required to submit reports with FinCEN are not required and will not be subject to liability for failing to do so. However, companies could find themselves in a crunch to complete and file beneficial ownership reports to the extent the appellate court stays the injunction in the coming days or weeks. Given the uncertainty, companies should proceed with evaluating compliance obligations in the event the injunction is overturned this year, and CTA’s reporting requirements snap back into effect.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.
CTA Injunction and DOJ Appeal – What Now?
On December 5, 2024, the Department of Justice filed a notice of appeal with the Fifth Circuit Court of Appeals of the December 3rd order that preliminarily enjoins enforcement of the Corporate Transparency Act (CTA) on constitutional grounds. The U.S. Financial Crimes Enforcement Network (FinCEN) also posted a statement to its website regarding the court’s ruling and the appeal. While the preliminary injunction remains in effect, companies that would otherwise be required to submit reports with FinCEN are not required and will not be subject to liability for failing to do so. However, companies could find themselves in a crunch to complete and file beneficial ownership reports to the extent the appellate court stays the injunction in the coming days or weeks. Given the uncertainty, companies should proceed with evaluating compliance obligations in the event the injunction is overturned this year, and CTA’s reporting requirements snap back into effect.
News from Scopelitis is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.