The case

On 23 December, the US Court of Appeals for the Fifth Circuit lifted the nationwide injunction against the Corporate Transparency Act. Thus, the original deadlines are legally back in effect. However, FinCEN opted to extend the deadlines for Reporting Companies adversely affected by the late-game litigation, notably granting an extension to 13 January 2025 for pre-existing Reporting Companies (i.e. those in existence prior to 1 January 2024).

Source: ​Paul Foster Millen, Millen Tax & Legal GmbH www.millentaxandlegal.ch & paul@millentaxandlegal.ch

The commentary

On 3 December, a US Federal District Court in the Eastern District of Texas issued an order granting a nationwide preliminary injunction against enforcement of the Corporate Transparency Act. On 23 December, however, in a relatively scathing order, a three-judge panel for the appellate court stayed the injunction on the unanimous grounds that the broad injunctive relief granted by the District Court Judge was outside his judicial authority. Two of the judges also ruled that any form of injunctive relief (e.g. only for the named Plaintiffs in the case) was inappropriate as the Corporate Transparency Act was likely well within Congress’s constitutional powers. Accordingly, the deadlines for disclosure of Beneficial Owner Information to the FinCEN were reactivated.
FinCEN, however, not wishing to play the grinch this Christmas, swiftly posted the following:
“In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows
o Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)” (emphases added).”
As such, those of us with Beneficial Owner Information disclosures due at the end of 2025 may enjoy our holidays without scrambling to file reports on the FinCEN portal. Rather, we have that to look forward to in the new year.

Please contact Paul if you have any questions on the above.