Court Order Restores Corporate Transparency Act Reporting Obligations — Most Filings Now Due by March 21, 2025
On Tuesday, February 18, 2025, a court lifted the last remaining nationwide injunction that prevented the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA), clearing the way for CTA reporting to resume. Following the order, FinCEN has (i) extended CTA reporting deadlines for most companies until March 21, 2025, and (ii) indicated that it may modify certain, yet unspecified, CTA requirements to further alleviate filing burdens on certain entities.
For context, Tuesday’s decision comes after a January order of the U.S. Supreme Court that lifted a similar nationwide injunction in a different case. Specifically, on January 23, 2025, the Supreme Court issued a short procedural order declaring that FinCEN could resume enforcement of the CTA’s Beneficial Ownership Information (BOI) reporting obligations while an underlying case — McHenry v. Texas Top Cop Shop — continues to be litigated in the U.S. Court of Appeals for the Fifth Circuit. FinCEN declined to resume CTA enforcement at the time, citing a separate nationwide injunction imposed in another case in the U.S. District Court for the Eastern District of Texas, Smith v. U.S. Department of the Treasury. The U.S. Department of Justice appealed Smith, and on February 18, 2025, the Eastern District of Texas lifted its stay pending the appeal. As a result of yesterday’s action, neither the McHenry nor the Smith nationwide injunctions currently remain in force.
FinCEN has set March 21, 2025, as the filing deadline for the vast majority of nonexempt companies — i.e., those formed before 2024, during 2024 and in 2025. Please review FinCEN’s CTA landing page for the latest.
Summary of Court Decisions and Potential Outlook
Barring an act of Congress to extend reporting deadlines, we expect that FinCEN’s new deadline for CTA compliance will remain in place for at least the next few months. The Supreme Court’s order restoring the CTA reporting obligations will remain in place at least until the Fifth Circuit has rendered its decision on the constitutionality of the CTA in McHenry. Should that court’s eventual decision be appealed, the Supreme Court’s January 23rd order will keep the CTA in place until the Supreme Court either declines the appeal — thus allowing the Fifth Circuit’s forthcoming decision to stand — or renders its own decision on the constitutionality of the CTA. The Fifth Circuit has imposed an “expedited” briefing schedule that will be complete by February 28, 2025, with oral arguments to follow on March 25, 2025.
At the same time it is deciding McHenry, the Fifth Circuit is also considering the Smith case on appeal. It is not yet clear whether McHenry will render Smith moot or whether the Fifth Circuit will choose to consolidate the two cases.
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In light of these recent decisions, nonexempt companies that have not yet made CTA filings will need to do so promptly. While it is still possible that the CTA deadlines will be extended by act of Congress, or that the CTA exemption categories or reporting obligations will be altered by FinCEN, we do not anticipate that such a determination will be made before the new March 21, 2025, deadline.
