On December 3, 2024, in Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States, et al., Judge Amos Mazzant of the United States District Court (Eastern District of Texas/Sherman Division) issued a preliminary nationwide injunction barring the enforcement of the Corporate Transparency Act (CTA) finding the following:
Having determined that Plaintiffs have carried their burden, the Court GRANTS Plaintiff’s Motion for a Preliminary Injunction. Therefore, the CTA, 31 U.S.C. § 5336 is hereby enjoined. Enforcement of the Reporting Rule, 31 C.F.R. 1010.380 is also hereby enjoined, and the compliance deadline is stayed under § 705 of the APA [Administrative Procedure Act]. Neither may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, BOI [beneficial ownership information] reporting deadline pending further order of the Court.
This would appear to cancel the need to file the Beneficial Owners Information Report as explained in my YouTube Video LLCs, Corporations and Trusts: Comply to Corporate Transparency Act by !2/31/24 to Avoid Steep Penalties which I posted yesterday on the YouTube channel for Torchlight Tax.
This is a classic example of Murphy’s Law. I held out until December to issue the instructions on how to file a Beneficial Owner Information report because I thought the CTA would not be enforced, as covered my initial video Corporate Transparency Act Found Unconstitutional. Then as soon as the video was in production, the expected injunction finally came out.
CAUTION
It is possible that this injunction will be reversed on appeal and that the 1 Jan 2025 filing date will be re-instituted. My opinion is that this is absurd. That being said, I cannot GUARANTEE that this will not occur.
This gives you the option of filing the Beneficial Ownership Information report “just in case” or of filing rapidly if the preliminary injunction is overturned and the 1 Jan 25 date Is re-instituted
I would think that even if the preliminary injunction is overturned, one would be given more time for filing. After all, we have had two courts rule that the CTA is unconstitutional.
You are welcome to contact Torchlight Tax for a free consultation at 877 758 7797 or email info@torchlighttax.com.
To view the full transcript of the court decision, click here.
