News & Events

news & events / 12.23.24 /Kenneth R. Jacobs

CTA Update: 5th Circuit Court Of Appeals Stays Enforcement Of CTA

Surprisingly (to this writer), the 5^th Circuit has stayed the enforcement of the nationwide injunction against filing the CTA pending a full hearing by the court. This means that the December 31, 2024 filing deadline has been reinstated.

The 5^th Circuit stated that the government has made a “strong showing” that the BOI filing requirements are constitutional. (But in a footnote, they added that “strong showing” does not necessarily mean “likelihood of success.”) They also pointed out that the last-minute stay of enforcement of a law passed by the “people’s representatives” inherently results in “irreparable harm.” Finally, the court noted that since the cost of filing might be less than $85 in time spent, the equities favored the government, and the public interest favors protecting against terrorism and money-laundering. The court’s decision is available HERE.

Based on the above, the stay has been lifted. The hearing by the full court on the appeal by the government of the motion for a preliminary injunction against enforcement of the BOI filing requirements also has been expedited.

What this means. Legally, this reinstates the filing deadline of December 31, 2024 for submitting Beneficial Ownership Information to the government. We still believe that a grace period (either formal or informal) will be granted by FinCEN in view of the holidays and the confusion generated by the initial stay. Nevertheless, we recommend that businesses subject to the CTA file their information on a timely basis if possible.

Unfortunately, the official extension of the filing deadline for Beneficial Ownership Information to December 31, 2025 also was removed from the stopgap spending bill ultimately approved by the House on Friday. We will see if the provision is reinserted when the more comprehensive spending bill is considered in March.

We wish everyone a wonderful holiday season!