CTA Update: Nationwide Preliminary Injunction Against CTA Reinstated

The status of the CTA has shifted multiple times since Dec. 3, 2024, when a Texas district court in TexasTop Cop Shop, Inc. v. Garland preliminarily enjoined the CTA and its BOI reporting rule (Reporting Rule) on a nationwide basis. As we previously reported, FinCEN appealed that ruling, and on Dec. 23, 2024, a motions panel of the Fifth Circuit stayed the injunction, allowing the CTA to go back into effect.

Three days following the stay, on Dec. 26, 2024, a different panel of the Fifth Circuit—the merits panel that will ultimately decide the appeal—issued an order to vacate the motion panel’s stay (Vacatur Order). The Vacatur Order reverses course and effectively reinstates the nationwide preliminary injunction against the CTA and the Reporting Rule. The merits panel explained that it took this action “in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.”

In response to the Vacatur Order, FinCEN updated its website on Dec. 27, 2024, noting:

In light of [the Vacatur Order], reporting companies are not currently required to file [BOI] with FinCEN and are not subject to liability if they fail to do so while the [Vacatur Order] remains in force. However, reporting companies may continue to voluntarily submit [BOI] reports.

As a result of the Vacatur Order, no filings under the CTA are currently required by law, including the initial BOI reports that reporting companies formed or registered prior to 2024 would otherwise have been required to file by Jan. 13, 2025, pursuant to an extension that FinCEN granted. 

The Fifth Circuit has scheduled arguments on the merits of FinCEN’s expedited appeal for March 25, 2025. This means that a decision on the merits of the appeal will likely not be issued until at least April 2025. While the CTA remains enjoined, reporting companies and affected individuals should continue to closely monitor CTA developments and consider what steps they need to take to be prepared to file their BOI reports in short order if the injunction is once again stayed, lifted, or otherwise made ineffective.

For additional information regarding the CTA and its reporting requirements, visit GT’s CTA Task Force page.