State compliance reports and FinCEN data

Fifth Circuit Lifts Injunction on Corporate Transparency Act, Mandates BOI Reports by January 1, 2025

Dec 23, 2024, 10:04 PM

The U.S. Court of Appeals for the Fifth Circuit has lifted a nationwide injunction that had blocked the enforcement of the Corporate Transparency Act (CTA), reinstating the requirement for businesses to report beneficial ownership information (BOI) to the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN). The decision, made on December 23, 2024, reverses a preliminary ruling by a Texas district court which had found the CTA to be beyond Congress's commerce clause power. The Fifth Circuit's ruling mandates that businesses existing before January 1, 2024, must comply with the BOI reporting by the January 1, 2025 deadline. The appellate court's decision was unanimous and emphasized that the CTA is likely constitutional, particularly when applied to corporations involved in interstate commerce. The stay was granted following an emergency motion by the government, and FinCEN has stated that it will comply with the court's order while the litigation continues.