News & Events

news & events / 01.24.25 /Kenneth R. Jacobs

FinCEN states that CTA reporting requirements remain voluntary Government interprets Injunction Issued in a Different CTA Case to apply Nationwide as well

Earlier today we reported that the Injunction in the “Top Shop” case (which the Government had appealed to the Supreme Court) had been overturned by the court. We expected FinCEN to reinstate the filing deadlines today.

We had been ignoring a parallel case, Samantha Smith and Robert Smith v. U.S. Department of the Treasury et. al. (U.S. District Court, E.D. Texas), which the Government had not appealed. The court in the Smith case also had deemed the CTA to be unconstitutional and also issued an injunction against enforcement of the CTA against the plaintiffs. However, we had interpreted the concurrent temporary stay of the “Reporting Rule” (requiring the filing of Beneficial Ownership Information by companies) granted by the District Court in the case, to apply only to the plaintiffs in that case as well. See the full case HERE.

 Apparently FinCEN disagrees. This morning, FinCEN stated:

“On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting 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.” [Emphasis added.]

As a result, compliance with the Reporting Rules in the CTA remains voluntary. We still recommend that at a minimum, companies send their reporting information to any third party filing agents whom they have retained. That way, if the Smith injunction is similarly overturned, you will be ready to make the necessary filing. But as of today, we are countermanding our instructions from yesterday’s report. Compliance with the Reporting Rules in the CTA remains voluntary.