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CTA Enforcement Temporarily Suspended
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction prohibiting enforcement of the Corporate Transparency Act (“CTA”) and associated regulations by the Treasury Department’s Financial Crimes Enforcement Network. In a dramatic ruling, the Court determined that “the CTA is likely unconstitutional as outside Congress’ power.”
The scope of the injunction precludes enforcement of any of the filing requirements of the CTA for companies formed before or after January 1, 2024. For example, the 90-day filing deadline for companies formed in 2024 also appears to be stayed, pending further action of the Court.
We want to remind you that this ruling is a preliminary injunction and it is expected that the government may seek an expedited appeal of the decision and request a stay of the order of the Federal District Court. Any further decision may significantly affect this order and we will keep you informed of any future developments.
Companies do not currently need to file reports under the CTA, but we recommend that companies continue to gather requisite information for filing and be prepared to file in anticipation of a potential stay or modification of the Court’s injunction.
Please contact your THSH attorney with any questions or concerns you may have about the injunction or the CTA generally.
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E-Alert is a newsletter that features the latest thinking from Tannenbaum Helpern's various departments.
12.05.2024 | PUBLICATION: E-Alert | TOPICS: Corporate, Investment Management, Real Estate