TL;DR: The Corporate Transparency Act (CTA) is back in effect with March 21 deadline.
What just happened? In an order signed on February 17, 2024, the District Court in Smith v U.S. Department of the Treasury struck down the last remaining nationwide injunction suspending enforcement of the Corporate Transparency Act (CTA). As a result, the CTA is back in general effect.
Based on its victory in Smith, FinCEN has set the new CTA filing deadline at March 21, 2025. Special enforcement rules and deadlines apply to certain reporting companies that are beneficiaries of disaster and other injunctive relief. For more detail, consult FinCEN’s updated website.
What’s next? Even with the removal of the Smith injunction, the CTA’s ultimate fate remains uncertain. In its website update, FinCEN hints that additional regulatory relief may be forthcoming, announcing in somewhat cryptic terms that:
- During the initial grace period (March 21), FinCEN “will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks;” and
- FinCEN “intends to initiate a process this year to revise the [CTA] reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”
Moving in parallel with any potential regulatory relief, competing legislation pending in Congress, if enacted, would either delay or completely repeal the CTA.
So, after all is said and done either through regulation or legislation, the CTA may end up surviving only in a much reduced form or even not at all. However, until then, every potential reporting company seems to have no other choice but to work towards the tight March 21 filing deadline in accordance with existing CTA guidance.
