A Texas federal court issued a nationwide injunction on Tuesday, Dec. 3, 2024, against the Corporate Transparency Act (CTA), a law requiring U.S. businesses to report ownership details to the Treasury Department.
Judge Amos L. Mazzant III of the U.S. District Court for the Eastern District of Texas granted the injunction following a lawsuit filed by Texas Top Cop Shop Inc., a firearms and tactical gear retailer, along with other businesses and the Libertarian Party of Mississippi. The plaintiffs argued that the CTA exceeds Congress’s authority by regulating all incorporated entities, even those not engaged in commerce.
The CTA mandated that approximately 32.6 million businesses disclose ownership details to the Treasury Department’s Financial Crimes Enforcement Network by 2025. The government defended the law, stating its goal is to combat anonymous shell companies, money laundering, and terrorism financing, which fall under Congress’s regulatory power.
Read more about the temporary ruling: Corporate Transparency Act Blocked Nationwide by Texas Court
FinCen is acknowledging the court’s ruling that temporarily halts the CTA filing requirement stating, "In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
However, the Department of Justice has filed a notice to appeal the federal ruling that issued the injunction.
At this time, the requirement to file by end of the year has been temporarily suspended due to this case, but, as stated, the government intends to appeal the ruling.
Businesses can still file the report if you want, or you can wait and see how the case turns out.