CORPORATE TRANSPARENCY ACT UPDATE
Enforcement Remains Suspended Despite Supreme Court Ruling
Key Takeaways:
- The Supreme Court recently stayed a nationwide injunction blocking enforcement of the Corporate Transparency Act (CTA).
- However, following that, a separate nationwide injunction remains in place, preventing the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) from enforcing the CTA. This injunction was issued by a Texas court in the case of Samantha Smith and Robert Means v. U.S. Department of the Treasury.
- This leaves reporting companies in limbo regarding their obligations under the law.
- FinCEN has suspended enforcement of the CTA’s reporting requirements and has stated that reporting companies are not subject to liability for failing to file while the injunction remains in effect.
- Reporting companies may still voluntarily submit beneficial ownership information reports to FinCEN.
- The U.S. Department of Justice has filed an appeal against the injunction, and if the court’s order is stayed, FinCEN plans to extend the reporting deadline by 30 days and may consider modifying requirements for lower-risk entities.
Disclaimer: This is a simplified summary and does not constitute legal advice.
It’s crucial for reporting companies to consult with legal counsel to understand the specific implications of these court rulings and to determine the appropriate course of action.
Contact McMechan Law for advice.
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