Supreme Court Makes CTA Related Ruling – Reporting Requirements Remain Voluntary
January 24, 2025
On January 23, 2025, the Supreme Court of the United States issued a stay of a nationwide injunction of the reporting requirements under the Corporate Transparency Act (“CTA”) issued by a Texas district court in Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al., No. 4:24-CV-478 (E.D. Tex. filed Dec. 3, 2024) previously reported on by Fairfield and Woods, P.C. on December 5, 2024.
Nonetheless, the separate nationwide injunction in Samantha Smith and Robert Means v. U.S. Department of the Treasury, No. 6:24-CV-336 (E.D. Texas filed Jan. 7, 2025) following the December injunction remains in place and, as it is based on different arguments and facts, is not lifted by the ruling of the Supreme Court of the United States on January 23, 2025.
As a result, the Financial Crimes Enforcement Network (“FinCEN”) issued a statement clarifying reporting requirements under the CTA. FinCEN stated that “[r]eporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
Fairfield and Woods continues to recommend that clients make preparations to comply with the CTA’s reporting requirements should a similar ruling affect currently in-place injunction, which might lead to a truncated timeline for compliance.