CTA Enforcement Paused
Lucas P. Sczygelski | 12.05.24
A federal district court in Texas issued a nationwide injunction Tuesday against enforcement of the Corporate Transparency Act (the “CTA”). In Texas Top Cop Shop, Inc. v. Garland, the U.S. District Court for the Eastern District of Texas held that the CTA exceeds the authority delegated to Congress under the Commerce Clause.
The CTA was set to impose various reporting requirements on most entities registered to conduct business in the United States, a reporting regime aimed at preventing money laundering behind the mask of shell company structures. Entities created during 2024 were already obligated to file reports. The reporting deadline for previously existing entities was January 1, 2025.
For now, entities need not comply with the upcoming January 1, 2025 filing deadline. Clients should note, however, that Tuesday’s injunction merely constitutes a temporary pause on enforcement. Enforcement of the CTA and its reporting requirements could resume if the court’s order is overturned on appeal or reversed on the merits.
If you have any questions about what this ruling means for you and your entities, please feel free to reach out to an attorney in Boardman Clark’s Business Practice Group.
DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.