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Per Bloomberg, https://news.bloombergtax.com/daily-tax-report/corporate-transparency-act-blocked-nationwide-by-texas-court [bloombergtax.com] this federal reporting act has been temporarily blocked by a court ruling. In the name of catching money laundering, the Treasury Department is demanding ownership information from all registered companies (Inc, LLP, etc.), in particular all the small companies. Larger companies are exempt from reporting. If you own all or part of a small company that is registered with your state department of commerce, you may want to discuss this with your lawyer or accountant.

The Corporate Transparency Act and its implementing regulations, which require US business entities to report stakeholder information to the Treasury Department, were preliminarily blocked nationwide by a Texas federal court on Tuesday.

Judge Amos L. Mazzant III of the US District Court for the Eastern District of Texas issued the injunction at the request of a family-run firearms and tactical gear retailer, called Texas Top Cop Shop Inc., among other co-plaintiff businesses and the Libertarian Party of Mississippi. Their lawsuit alleged that the CTA falls outside of Congress’s powers to regulate interstate and foreign commerce because it regulates incorporated entities regardless of whether they engage in commercial activity.

“For good reason, Plaintiffs fear this flanking, quasi-Orwellian statute and its implications on our dual system of government,” Mazzant wrote.

The CTA required that an estimated 32.6 million existing business entities disclose their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network before 2025. The government argued that the law’s function—to crack down on anonymous shell companies and deter money laundering, terrorism financing, and other illicit economic activity—falls within Congress’s regulatory duties.

The court docket can be seen at, https://www.bloomberglaw.com/public/desktop/document/TexasTopCopShopIncetalvGarlandetalDocketNo424cv00478EDTexMay28202 [bloomberglaw.com]

An earlier court action was ruled to only apply to members of the National Small Business Assn., https://www.nsbaadvocate.org/post/press-nsba-response-to-fincen-failure-to-apply-cta-ruling-fairly-to-all-small-businesses [nsbaadvocate.org]
Your AC submitter has put this off (normal procrastination) but with the hopes that someone would be able to defeat this new federal database--and that Treasury would hunt down money laundering by their own efforts.

Original Submission