All Nationwide Injunctions Now Lifted – New March 21, 2025 Filing Deadline
Following numerous court decisions over the last three months in cases related to the constitutionality of the Corporate Transparency Act (the “CTA”), the Financial Crimes Enforcement Division of the U.S. Department of Treasury (“FinCEN”) is once again able to enforce the CTA. In early February 2025, the Departments of Justice and Treasury filed appeals in the two CTA cases brought in the U.S. District Court for the Eastern District of Texas (Texas Top Cop Shop v. Bondi and Smith v. U.S. Department of Treasury) where the district court had issued nationwide preliminary injunctions of the enforcement of the CTA, which represented the first efforts to preserve the CTA under the Trump administration. In response to these appeals, on February 18, 2025, the last of the nationwide injunctions pausing the CTA was stayed, and as a result the government is once again able to enforce the CTA’s beneficial ownership information reporting (“BOIR”) requirements, unless and until contrary legislative or judicial action is taken.
Updated BOIR Filing Deadlines Announced by FinCEN
On February 19, 2025, confirming previously provided guidance, FinCEN announced that the new BOIR filing due date for most reporting companies’ initial, updated and/or corrected BOIRs that were not required to be filed due to the injunctions (including for entities created or registered prior to January 1, 2024) would be 30 days from FinCEN’s announcement, which is March 21, 2025 (subject to certain later deadlines, including for those reporting companies whose deadlines were extended due to disaster relief).
FinCEN also indicated that, during the period before this updated BOIR filing deadline, in keeping with the Treasury department’s commitment to reducing regulatory burdens on businesses, it will assess its options to further modify this deadline (and provide appropriate advance notice of any such modifications), while prioritizing reporting for those entities that pose the most significant national security risks. In addition, FinCEN has indicated that it intends to initiate a process this year to revise the BOIR reporting rules to reduce burdens on lower-risk entities, including many U.S. small businesses. Thus, later this year, FinCEN may adopt changes to the CTA rules and regulations that will further limit the scope of the companies subject to BOIR filing obligations, although the specifics of any of those exemptions are unknown at this time.
Proposed Legislation to Repeal or Delay CTA Pending
In addition to continued litigation involving the CTA, Congress is considering measures to extend filing deadlines and to repeal the CTA.
On January 25, 2025, Representative Zachary Nunn (R-IA) introduced a bipartisan bill to extend the CTA filing deadline to January 1, 2026 for entities created or registered prior to 2024. This bill passed the House of Representatives unanimously on February 10, 2025, but the Senate has not yet acted on the legislation. Senate Banking Committee Chair Tim Scott (R-SC) introduced a companion bill on February 11, 2025, but he has not yet signaled when the Committee may consider the measure. Nunn introduced similar legislation in the prior Congress that cleared the House in December 2023, but which stalled in the then Democratic-controlled Senate. A deal to include a CTA filing deadline delay in the December 2024 legislative budget package fell apart largely for unrelated reasons.
Last month, Representative Warren Davidson (R-OH) and Senator Tommy Tuberville (R-AL) reintroduced their separate bill to repeal the CTA. This legislation was also introduced in the prior Congress but did not move past introduction, and we believe it is unlikely to garner bipartisan support in this Congress.
No legislative changes affecting the CTA have been enacted yet, and it is unclear whether, even if any changes are made, they will be effective before the new FinCEN deadline. Because of this, we believe that reporting companies cannot assume that any legislation will be timely passed and should prepare to make necessary BOIR filings by the updated BOIR filing deadlines.
CTA Litigation Ongoing
Appeals in both the Texas Top Cop Shop and Smith cases are pending, with oral arguments in the Texas Top Cop Shop case scheduled before the Fifth Circuit on April 1, 2025. While decisions in these cases may impact the ultimate resolution of the CTA’s enforceability, they are unlikely to be made prior to the updated BOIR filing deadlines issued by FinCEN. The Texas Top Cop Shop and Smith cases are further detailed below.
Several other legal cases questioning the constitutionality of the CTA remain pending in federal courts throughout the United States, with some cases initially having been decided in favor of the constitutionality of the CTA, while others have come to the opposite conclusion. Many of the initial decisions rendered in these cases have been appealed to higher courts.
Next Steps for Reporting Companies
As summarized above, a number of challenges to the enforceability of the CTA through litigation and legislative proposals are pending, and the CTA’s ultimate fate continues to remain unclear. However, a resolution of these challenges is unlikely in the 30 days prior to the updated BOIR filing deadlines issued by FinCEN. Absent such a resolution, reporting companies subject to the CTA that have not yet filed their initial BOIRs will need to quickly analyze who their beneficial owners are, gather the required information about them and prepare and file relevant BOIRs by no later than March 21, 2025. Further, any reporting companies whose BOIRs require updates or corrections that have not yet been made will need to prepare and file any required updates or corrections no later than March 21, 2025.
We continue to monitor pending litigation related to the CTA, as well as proposed legislation to repeal or delay the filing deadlines for the CTA. We will provide additional updates as material developments occur.
Detailed Background for Key Cases Imposing Nationwide Injunctions
Texas Top Cop Shop
On February 7, 2025, the government filed its brief with the Fifth Circuit Court of Appeals in what is now known as Texas Top Cop Shop v. Bondi.[1] This filing appealed the decision of the U.S. District Court for the Eastern District of Texas issued on December 3, 2024,[2] which had granted a nationwide preliminary injunction of the enforcement of the CTA. As previously addressed in earlier updates, that preliminary injunction was stayed on December 23, 2024 by a Motions Panel of the Fifth Circuit[3] (with FinCEN in response issuing updated filing deadlines), but was then reinstated by a Merits Panel of the Fifth Circuit three days later.[4] The U.S. Supreme Court lifted the preliminary injunction in the case (reversing the ultimate Fifth Circuit decision) on January 23, 2025[5] (but the filing deadlines of the CTA remained unenforceable due to the Smith case discussed below). In its brief for its Fifth Circuit appeal, the government argued that the CTA’s enactment was within Congress’ powers, and it expressed its continuing belief that the CTA is necessary to combat tax fraud, money laundering and other financial crimes. Oral arguments in this case are scheduled before the Fifth Circuit beginning on April 1, 2025.
Smith
On January 7, 2025, in a separate case entitled Smith v. U.S. Department of the Treasury,[6] a separate district court in the Eastern District of Texas issued a second nationwide injunction of the CTA. On February 5, 2025, the Treasury Department filed a motion to appeal that injunction. While the Supreme Court’s stay of the preliminary injunction in the Texas Top Cop Shop case had lifted that case’s preliminary injunction of the enforcement of the CTA, the injunction in Smith was not affected. In its recent filings in the Smith case, the government cited the Supreme Court’s ruling in the Texas Top Cop Shop case and FinCEN’s intent to extend the CTA compliance deadline and reassess its CTA rules, as part of its arguments to overturn the Smith court’s stay of CTA enforcement. On February 18, 2025, the Smith district court, noting the Supreme Court’s decision in Texas Top Cop Shop, lifted the injunction. Additional filings are expected to be made with the Fifth Circuit in the coming weeks in the Smith appeal.
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[1] This case was formerly Texas Top Cop Shop v. Garland.
[2] No. 24-cv-478 (E.D. Tex. Dec. 3, 2024).
[3] No. 24-40792, 2024 WL 5203138 (5th Cir. Dec. 23, 2024).
[4] No. 24-40792, 2024 WL 5224138 (5th Cir. Dec. 26, 2024).
[5] McHenry v. Texas Top Cop Shop, Inc., 604 U.S. No. 24A653, 2025 WL 272062.
[6] No. 24-cv-336, 2025 WL 41924 (E.D. Tex. Jan. 7, 2025).
