Corporate Transparency Act on hold through March

The Fifth Circuit Court of Appeals panel on Dec. 26 reinstated the nationwide injunction against the Corporate Transparency Act (CTA) after an appellate court reversed the preliminary injunction issued by a judge for the U.S. District Court for the Eastern District of Texas earlier in the month. This recent decision delays enforcement of the CTA until at least March 25, when the panel is expected to hear arguments on whether to maintain the injunction while the broader case proceeds before the full court. This means impacted small businesses are no longer required to comply with the law’s reporting requirements until at least March 25. This statute – enacted by Congress in 2021 – aims to combat illicit activity such as tax fraud and money laundering. It requires select businesses – including OMS practices that employ fewer than 20 people and generate less than $5 million in revenue annually – or both – to file reports by Jan. 1, 2025, if they were in business before Jan. 1 of this year. In Texas Top Cop Shop v. Garland, the plaintiffs alleged that the CTA oversteps Congress’ jurisdiction to regulate interstate and foreign commerce and infringes on First Amendment protections.