In a recent blog post (click here to read), we discussed that on December 3rd, the enforcement of the Corporate Transparency Act (“CTA”) had been temporarily suspended as a result of the Eastern District of Texas ruling that ordered a nationwide preliminary injunction.
As anticipated, the U.S. Department of Justice issued a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit on December 5th, and the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) posted a statement to its website on December 7th confirming that it will comply with the federal court order as long as it remains in effect. FinCEN’s statement notes that while reporting companies are not required to file their beneficial ownership information reports with FinCEN while the preliminary injunction is in effect, reporting companies may voluntarily do so.
At present, the CTA cannot be enforced against entities otherwise subject to reporting requirements, but if the Fifth Circuit or the Supreme Court stays the federal district court’s order pending appeal, reporting obligations may change on short notice. Therefore, it is important that clients with filing obligations monitor developments as the appeals process unfolds.
If you have questions regarding the CTA or the preliminary injunction, please contact Joshua B. Beisker at 585-258-2879 or jbeisker@underbergkessler.com.
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