Corporate Transparency Act Compliance in Flux: Legal Challenges, New Deadlines, and Future Uncertainty

The Corporate Transparency Act (CTA) faced significant legal drama in December 2024. In Texas Top Cop Shop, Inc. v. Garland, a federal district court issued a nationwide preliminary injunction on December 3rd, halting enforcement of the CTA and suspending reporting deadlines. However, according to an article by Holland & Knight, the Fifth Circuit Court of Appeals quickly overturned this on December 23, 2024, reinstating the CTA’s reporting requirements and penalties. 

The court dismissed claims of an undue compliance burden, noting that businesses had years to prepare since the CTA’s enactment in 2021 and the 2023 FinCEN reporting announcement.

FinCEN extended some reporting deadlines to acknowledge potential compliance challenges due to the temporary injunction. The article highlights these key updates:

• Entities created before January 1, 2024, now have until January 13, 2025, to file beneficial ownership reports.
• Entities registered between September 4, 2024, and December 23, 2024, also have until January 13, 2025, to comply.
• Entities registered from December 3, 2024, to December 23, 2024, gain an additional 21 days beyond the original deadline.
• Disaster relief-qualifying entities may have further extensions.
• Post-January 1, 2025, entities must file within 30 days of creation.

Ongoing developments are expected. Legal challenges persist nationwide while Congress debates potential amendments, including repeal proposals citing high costs and vague regulations. Additionally, the incoming administration’s Project 2025 plan advocates repealing the Corporate Transparency Act entirely. FinCEN’s evolving guidance highlights the need for vigilant monitoring of compliance deadlines and regulatory changes.