Updating my recent post on the Corporate Transparency Act (CTA), many of you may have heard that a federal court in Alabama recently ruled that the CTA is unconstitutional. The National Small Business Association (NSBA) and one of its members sued for an injunction prohibiting FinCEN from enforcing the CTA. The court ruled that the CTA is unconstitutional because it exceeds the constitution’s limits on Congress’s authority.
Many people think the court’s ruling means they don’t have to file reports under the CTA. However, the court’s ruling is limited to the plaintiffs in that case. FinCEN has appealed the decision and announced that all other companies subject to the CTA are still required to file beneficial ownership information (BOI) reports. You can find FinCEN’s announcement here.
So if you are not a member of the NSBA, prudent practice is to comply with the CTA. This means filing a BOI report within ninety days after forming any new entity, and filing a BOI report by 12/31/24 for any entity that was in existence on 12/31/23. Feel free to contact me if you need any help filing your report or have any questions regarding whether you are exempt from the CTA.
I will continue to monitor this situation and keep you updated. Thanks,
Rick Randel
This post is not intended and should not be relied upon as legal or tax advice pertaining to any specific matter. You are encouraged to seek competent legal and tax counsel before proceeding with any transaction involving any of the matters discussed above.
