Breaking News: Texas Federal
Court Temporarily Halts
Corporate Transparency Act
Until Further Notice

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction halting the national enforcement of the Corporate Transparency Act (“CTA”). In that case, Texas Top Cop Shop, Inc. v. Garland, the Court did not address the larger constitutionality of the CTA but, instead, determined that “the CTA and Reporting Rule are likely unconstitutional” for the limited purpose of granting a preliminary injunction. This injunction temporarily prevents the enforcement of the CTA, meaning that the Financial Crimes Enforcement Network (“FinCEN”) is prohibited from taking any enforcement actions related to the CTA or its Reporting Rule until further notice, including the CTA’s impending January 1, 2025, filing deadline and associated late penalties, fees, fines, and criminal violations.

To reiterate, the Court’s injunction is a preliminary measure, and further legal proceedings in this and other related cases may alter or impact this order. These proceedings may further complicate or confuse a reporting companies’ good faith compliance efforts with respect to the CTA.

Complicating matters further, FinCEN currently has a pending appeal with the 11th Circuit Court of Appeals regarding the constitutionality of the CTA, following the District Court for the Northern District of Alabama’s decision in NSBU v. Yellen earlier this year, and we expect an appeal to today’s order to follow as well.

RR&A will continue to monitor for updates from the courts and FinCEN. We advise all of our clients to pay close attention to all of the latest CTA guidance. If you have any questions, please contact us at info@rreeselaw.com.

You can read the full text of the Court’s order here.
You can find RR&A’s previous articles concerning the CTA here.