On Dec. 3, the U.S. District Court for the Eastern District of Texas suspended the nationwide implementation of the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) reporting requirements. 

The District Court issued an opinion and order in Texas Top Cop Shop, Inc., et al. v. Merrick Garland, Attorney General of the United States (Case No. 4:24-cv-478). In its ruling, the Court found that the CTA is likely unconstitutional and issued a preliminary injunction on BOI reporting.

According to the Ohio Society of Certified Public Accountants, BOI reporting companies are urged to pay attention to updates and proceedings on appeals in this and other cases that could modify or change this order. You can find a copy of the order here. 

On Dec. 4, OSCPA sent a letter along with numerous other state CPA societies, urging the Financial Crimes Enforcement Network (FinCEN) and the U.S. Treasury Department to push back the deadline for initial filings by at least one year to no earlier than Jan. 1, 2026. 

As reported by the Journal of Accountancy, FinCEN, which enforces the CTA, is reviewing the order. A spokesperson pointed out that other courts have denied similar requests. The Justice Department (DOJ) filed a notice of appeal on Dec. 5.

In its ruling, the court called the CTA “quasi-Orwellian,” and stated the legislation “is likely unconstitutional as outside of Congress’s power.” It also found that “because the reporting rule implements the CTA, it likely is unconstitutional for the same reasons.”

“The AICPA understands the confusion and anxiety that business owners have struggled with regarding the BOI reporting requirement,” Melanie Lauridsen, AICPA Vice President–Tax Policy and Advocacy, said. “We believe that the injunction … is applicable nationwide to all small businesses. While we are still awaiting formal guidance from FinCEN, if this injunction is applicable as we believe, many small businesses would receive the much-needed BOI reporting relief. The AICPA will continue an open dialogue with FinCEN in the hopes that our questions and concerns will be addressed, and we will continue to advocate on behalf of small businesses for clarity and relief.”