The CTA Preliminary Injunction, 8 Days Later...
Free materials deciphering the Court's Order, and FinCEN's response
A week ago, I provided you a brief update on the Memorandum Opinion and Order issued on December 3, 2024 by Judge Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas. This Order generally imposed a nationwide preliminary injunction against enforcement of the Corporate Transparency Act (CTA).
Many are eager to chant, “ding, dong, the CTA is dead” in response to the Court’s ruling. But as with anything in law, it is dangerous to assume an absolute position. In a sense, the Court’s Order leaves some unanswered questions. Likewise, FinCEN’s Alert posted in response to this Order left some unanswered questions - along with an unconvincing offer to reporting companies to “continue to voluntarily submit beneficial ownership information reports.”
This leaves a bigger question - what should you do? How should you be informing clients? There are too many permutations (based on variations of how firms have handled CTA reporting) to give you one, unified client alert upon which you can rely. But, what I can offer are my thoughts on nuances we can glean from the Court’s Order, FinCEN’s response, and the U.S. Code provision and Regulations themselves.
So, I am offering you (for free) the slides I have prepared - you can find them linked at the beginning of this article.
In some cases, I may be wrong or incomplete in my analysis. These materials are prepared to accompany a one-hour presentation, and nothing more. But, my goal in this newsletter is to help you satisfy your professional obligations to your clients, so I have taken the position that it is too early to assume that everyone is forever off the hook. In particular, I address issues such as:
What about filing obligations having a deadline before December 3, 2024?
What about inaccurate information previously submitted to FinCEN, and associated penalties?
What if you promised to file? And, what are your obligations if perhaps you have already collected payment for a promise to file that may or may not have been fulfilled?
And, if you would like to register for a one-hour presentation tomorrow on these materials, click the following button (paid subscribers can input the promotional code they should have received in prior articles and e-mails):
In the meantime, stay tuned - the U.S. Department of Justice has filed a Notice of Appeal to the 5th Circuit. Regardless of what happens at the 5th Circuit level, there is a good chance that the U.S. Supreme Court takes this up given the myriad other pending challenges and appeals nationwide (including in the 11th Circuit). Significant developments will be addressed in this newsletter, so subscribe if you would like to receive updates on this and other matters in tax, trusts, and estates.