The US Department of Justice has filed an appeal with the Supreme Court in Texas Top Cop Shop, Inc. v. Garland, after a lower court ruling blocked the enforcement of the Corporate Transparency Act’s (CTA) reporting requirements nationwide. A new motion suggests that FinCEN would consider adding a 30-day grace period for compliance.
The case began when U.S. District Judge Mazzant from the Eastern District of Texas granted the National Federation of Independent Business (NFIB) request for a preliminary injunction, blocking the CTA’s reporting requirements. The government appealed, and after the Fifth Circuit initially granted their request to stay the injunction, a separate panel later vacated it.
However, before this could be finalized, the Department of Justice filed an application with the Supreme Court to put a halt on the Texas Top Shop nationwide preliminary injunction. A stay was granted, which temporarily halted the enforcement of the CTA.
Despite this, another U.S. District Judge in Texas, Jeremy D. Kernodle, ruled that FinCEN must stop enforcing the new law against specific plaintiffs, Samantha Smith and Robert Means. The ruling applied nationwide, but FinCEN acknowledged that a separate order still remains in place, and reporting companies are not currently required to file beneficial ownership information.
In response to this development, the Department of Justice has filed an appeal with the Supreme Court and requested a stay of the injunction. During the 30-day period, FinCEN plans to assess whether it should modify the CTA’s reporting requirements. The agency also intends to prioritize reporting for entities posing significant national security risks while reducing regulatory burdens on smaller businesses.
While the exact changes that may be implemented are unclear, a Treasury official stated that FinCEN would work to reduce regulatory burdens on businesses during this period. As of now, reporting remains voluntary, and companies may continue to submit beneficial ownership information reports voluntarily through FinCEN’s E-Filing system.
Source: https://www.forbes.com/sites/kellyphillipserb/2025/02/06/government-appeals-decision-blocking-business-ownership-reports-but-hints-at-coming-policy-change