On Tuesday, Dec. 3, a Texas-based federal court issued a nationwide preliminary injunction temporarily blocking enforcement of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirement.
This ruling effectively halts the requirement for reporting companies to disclose BOI to the Financial Crimes Enforcement Network (FinCEN) despite the looming Jan. 1 compliance deadline for reporting companies formed before 2024.
The CTA required that an estimated 32.6 million existing business entities disclose their beneficial owners to FinCEN before 2025. The government argued that the law’s function — to crack down on anonymous shell companies and deter money laundering, terrorism financing and other illicit economic activity — falls within Congress’s regulatory duties.
But the federal court’s assessment found the CTA and BOI requirements likely violate constitutional protections and are likely “outside of Congress’s power.”
The ruling, however, is not a final determination of the CTA’s constitutionality; instead, it temporarily halts enforcement while the case proceeds.
The AICPA is working with FinCEN and the U.S. Treasury for additional guidance on the injunction. Read more.