In an abrupt about face, on December 26th a panel of the U.S. Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) reinstated a nationwide preliminary injunction on enforcement of the CTA that had been stayed (frozen) by a different panel of the Fifth Circuit just three days earlier. As a result, enforcement of the CTA is again prohibited and reporting companies are not currently required to file BOI reports. The Financial Crimes Enforcement Network (“FinCEN”) has, however, stated that reporting companies may continue to voluntarily submit BOI reports.
In reinstating the preliminary injunction, the Fifth Circuit said that it was doing so to preserve the status quo while the court considers the substantive issues under appeal. The Fifth Circuit will hear the appeal on an expedited basis and has scheduled oral arguments for March 25, 2025. In the interim, the government may seek reinstatement of CTA enforcement by requesting a hearing before all of the judges of the Fifth Circuit or on appeal to the U.S. Supreme Court.
While waiting for clarity from the courts, reporting companies may choose to voluntarily file BOI reports. Reporting companies that choose not to do so should carefully monitor developments and be ready to file their BOI reports on short notice if enforcement of the CTA is reinstated.
This update is intended to bring CTA developments to your attention and is provided for informational purposes only and does not serve to replace professional legal advice. This is a summary only, and you may wish to consult with us for legal advice before taking action.
