Dear All,
I trust this message finds you well and that you are enjoying the holiday season.
Significant developments have emerged from the United States Court of Appeals for the Fifth Circuit concerning the enforceability of the Corporate Transparency Act (CTA). Initially, the District Court enjoined enforcement of the CTA, prompting the Government to appeal and seek a stay of that decision. The Fifth Circuit initially granted the Government’s motion, temporarily reinstating the CTA and mandating that Homeowners’ Associations (HOAs) and other entities file their Beneficial Ownership Information (BOI) reports by January 13, 2025, under threat of fines and other enforcement actions.
However, the Fifth Circuit’s merits panel has now vacated the prior stay order. As a result, the District Court’s preliminary injunction barring enforcement of the CTA has been reinstated. In effect, this vacates the CTA Reporting Rule and relieves HOAs and similar entities from the obligation to file BOI reports at this time.
It is important to note that this is not a final resolution of the CTA’s enforceability. The case remains pending on appeal, and the CTA could become enforceable again depending on the outcome. Furthermore, given the divergent treatment of this issue by other Circuit Courts, it is highly probable that the matter will ultimately be reviewed by the United States Supreme Court.
For the moment, the CTA Reporting Rule is unenforceable, and no immediate action is required. Please remain vigilant as the legal landscape continues to evolve, and further updates will be provided as developments occur.