Fifth Circuit Grants Stay: FinCEN Extends CTA Initial Reporting Deadline

3 min

As detailed in our prior client memo regarding Texas Top Cop Shop, Inc. v. Garland, the federal district court in the Eastern District of Texas (Sherman Division) issued an order for a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) on December 3, 2024.[1] After the District Court's order, on December 5, 2024, the U.S. Department of Justice (DOJ) filed its notice of appeal on behalf of the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury to the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit). On December 11, 2024, the DOJ filed with the District Court a motion to stay the preliminary injunction pending appeal, which the District Court denied on December 17, 2024.

Thereafter, the DOJ filed with the Fifth Circuit an emergency motion for a stay pending appeal and expediting the appeal to the next available oral argument panel. On December 23, 2024, the Fifth Circuit issued an order granting the government's emergency motion, staying the District Court's injunction pending appeal and expediting the appeal to the next available oral argument panel. In light of the Fifth Circuit's order, FinCEN released an update that evening noting that reporting companies are, once again, required to file beneficial ownership information reports (BOIRs) with FinCEN but extending the reporting deadline for certain reporting companies, as set forth in the chart below.

Event
Revised Reporting Deadline

Reporting companies created or registered before January 1, 2024

January 13, 2025

Reporting companies created or registered in the U.S. on or after September 4, 2024, that had a filing deadline between December 3 and December 23, 2024

January 13, 2025

Reporting companies that qualify for disaster relief under prior FinCEN guidance and have extended deadlines

January 13, 2025, or later deadline

Reporting companies created or registered in the U.S. between December 3 and December 23, 2024

Additional 21 days from their initial filing deadline

Reporting companies created or registered on or after January 1, 2025

30 days after receiving actual or public notice that their creation or registration is effective

The Fifth Circuit’s order represents the first time a federal appellate court has weighed in on the constitutionality of the CTA, albeit in the context of deciding a motion to stay pending appeal. Although the Fifth Circuit has not formally ruled on the constitutionality of the CTA, the Fifth Circuit's order suggests that the Fifth Circuit will uphold the constitutionality of the CTA and its implementing reporting regulations when it ultimately rules on the merits of the case.[2]

We recommend that reporting companies file their BOIR by or before the deadlines set forth above.

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Kevin Shepherd
Michael Schiffer
Alexander Koff


[1] Texas Top Cop Shop, Inc. v. Garland, C.A. NO. 4:24-CV-478, 2024 U.S. Dist. LEXIS 218294 (E.D. Tex. Dec. 3, 2024). The court amended the Order to correct a typographical error on December 5, 2024.

[2] After the Fifth Circuit stayed the District Court’s preliminary injunction, the next day, December 24, the Plaintiffs/Appellees filed an emergency petition for rehearing en banc seeking to have the full Fifth Circuit vacate the order of the panel granting the stay and deny the DOJ’s motion. Plaintiffs/Appellees have requested a decision on their emergency petition by January 6, 2025.