On Jan. 23, 2025, the U.S. Supreme Court granted the U.S. government’s request for a stay (SCOTUS Order) of the nationwide preliminary injunction of the Corporate Transparency Act (CTA) issued by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop, Inc. v. McHenry.¹ According to the brief order, the stay remains in effect pending disposition of the appeal before the Fifth Circuit and subsequent disposition of a petition for a writ of certiorari, if any. 

Oral arguments for the expedited Fifth Circuit appeal are scheduled for March 25, 2025.

Background

The status of the CTA has shifted multiple times since Dec. 3, 2024, when a Texas district court in Texas Top Cop Shop, Inc. v. McHenry (formerly Texas Top Cop Shop, Inc. v. Garland), preliminarily enjoined the CTA and its BOI reporting rule (Reporting Rule) on a nationwide basis, approximately four weeks ahead of a key Jan. 1, 2025, deadline. As we previously reported, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) appealed that ruling, and on Dec. 23, 2024, a motions panel of the U.S. Court of Appeal for the Fifth Circuit stayed the injunction, allowing the CTA to go back into effect.
 
Three days following the stay, on Dec. 26, 2024, a different Fifth Circuit panel issued an order to vacate the motion panel’s stay, effectively reinstating the nationwide preliminary injunction against the CTA and the Reporting Rule. On Dec. 31, 2024, the U.S. government filed an emergency application with the Supreme Court to stay the preliminary injunction once again.

On Jan. 7, 2025, another federal judge of the U.S. District Court for the Eastern District of Texas ordered preliminary relief barring CTA enforcement in Smith v. U.S. Department of the Treasury.² To date, the government has not appealed the ruling in Smith.

The SCOTUS Order

In response to the SCOTUS Order, FinCEN updated its website on Jan. 24, 2024, noting:
 

Takeaways

No filings under the CTA are currently required by law, including the initial BOI reports that reporting companies formed or registered prior to 2024 would otherwise have been required to file by Jan. 13, 2025, pursuant to an extension that FinCEN granted on Dec. 27, 2024.

While enforcement of the CTA remains suspended, reporting companies and affected individuals should continue to monitor CTA developments and consider what steps they may need to take to be prepared to file their BOI reports in short order if the injunction is once again stayed, lifted, or otherwise made ineffective.