On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction which temporarily halts the enforcement of the Corporate Transparency Act (the “CTA”). In the case Texas Top Cop Shop, Inc. v. Garland, the Court did not rule that the CTA is unconstitutional, but determined that “the CTA and Reporting Rule are likely (emphasis added) unconstitutional” for purposes of granting a preliminary injunction. This injunction prevents the enforcement of the CTA, meaning that FinCEN is prohibited from taking any enforcement actions related to the CTA or its Reporting Rule until further notice.
At present, FinCEN continues to accept Beneficial Ownership Information filings. While FinCEN has not yet announced whether it will appeal the preliminary injunction, it is important to note that the agency has a pending appeal with the 11th Circuit Court of Appeals regarding the constitutionality of the CTA, following the District Court for the Northern District of Alabama’s decision in NSBU v. Yellen earlier this year.
Please keep in mind that the December 3rd injunction is a preliminary measure, and further legal proceedings in this and other related cases may alter or impact this order. The Firm is closely monitoring the situation and maintaining regular communication with FinCEN. We will provide further updates as new information becomes available