On March 1, 2024, a U.S. federal district court held in a 53 page opinion the “Corporate Transparency Act is unconstitutional because it cannot be justified as an exercise of Congress’ enumerated powers.”
FinCEN Reaction
On March 4, 2024, the U.S. Financial Crimes Enforcement Network (FinCEN) announced:
"On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. FinCEN will comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time."
Next Steps
The U.S. Government will likely appeal the case and the U.S. appeals process can be a lengthy one. Unless you are Isaac Winkles, the National Small Business Association, or one of the 65,000 members of the U.S. National Small Business Association, you are still subject to the CTA.
If your reportable entity was in existence prior to January 1, 2024, you have until December 31, 2024 to report. This gives you some time to see if the U.S. Government will suspend BOI reporting pending the appeal process. If you formed a new reportable entity in 2024 subject to the 90 day deadline for submitting your report, I recommend you proceed according to your deadline.
For assistance, please contact me via my contact page or at elizabeth@elizabethmcmorrowlaw.com.