Contributed Content: Charles Wismer, CEO, FIncenFetch

On Wednesday, December 3, a federal judge in Texas issued a ruling that temporarily suspends enforcement of the Corporate Transparency Act nationally. This is not a repeal but a temporary stay of enforcement.

At FincenFetch, we diligently monitor cases that could impact the CTA and our services. We aim to provide our customers with details on this case to assist in guiding their operations.

This situation resembles the Alabama case in March, in which the stay of enforcement was limited to a small group of companies. One week after the ruling, the Department of Justice filed an appeal.

Federal judges can apply injunctions to either small groups or nationally. In the Texas case, due to its national implications, it's anticipated the Justice Department will file an appeal to temporarily lift the stay at likely the same speed as in the Alabama case. Based on patterns in similar cases such rulings are often addressed by appellate courts quickly, often within weeks to months.

While the outcome of any appeal is uncertain, the Corporate Transparency Act's purpose as a national defense tool and its resilience in previous legal challenges suggest that a repeal is unlikely. Other cases, such as Firestone in Oregon (September) and the CAI case in Virginia (October), failed to lead to injunctions.
Here are some helpful things to know while we await further developments:

• As it stands currently, FinCEN cannot enforce penalties. You can continue to file reports or allow clients to wait for a resolution to this injunction.
• As in previous cases, FincenFetch will continue to provide BOI filing solutions and operate as usual until a final resolution on the CTA's constitutionality is determined.
• We remain committed to keeping our customers informed with updates relevant to them and their clients.

Should this issue extend into January, it remains to be seen whether FinCEN will proactively adjust the compliance deadline. We will closely monitor the developments, especially the anticipated Department of Justice appeal and the subsequent court actions.

Please note that this development is recent, and more information is unlikely to be available until FinCEN shares an update or files the appeal.

We (FincenFetch) will provide future updates as the situation progresses.

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