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Background
As enacted, the CTA required non-exempt U.S. entities and non-exempt foreign entities registered to do business in the United States to submit BOI reports to a confidential database maintained by the U.S. Department of the Treasury, Financial Crimes Enforcement Network (FinCEN). The CTA took effect Jan. 1, 2024.
The CTA’s status subsequently shifted multiple times.1 On Dec. 3, 2024, a Texas district court in Texas Top Cop Shop, Inc. v. McHenry preliminarily enjoined the CTA and its BOI reporting rule (Reporting Rule) on a nationwide basis. On Feb. 18, 2025, BOI reporting requirements were reinstated. Thereafter, on March 21, 2025, FinCEN issued an Interim Final Rule exempting domestic companies and U.S. beneficial owners from BOI reporting requirements. As a result, non-exempt foreign reporting companies were required to file their BOI reports by April 25, 2025.
Eleventh Circuit Ruling
On March 1, 2024, in Nat'l Small Bus. United v. Yellen the U.S. District Court for the Northern District of Alabama found the CTA unconstitutional on the grounds that it exceeds Congress’ enumerated powers.2 The district court rejected arguments that the CTA constituted a valid exercise of authority under the Commerce Clause and Necessary and Proper Clause of the U.S. Constitution, finding that the CTA does not regulate commercial activity on its face and applies to entities lacking a nexus to interstate commerce. The district court further held that “‘even if’ the CTA’s provisions were ‘necessary,’ ‘such an expansion of federal power is not a ‘proper’ means for making those [policy goals] effective.’”3 The district court’s injunction, however, applied only to the plaintiffs, namely the National Small Business Association and its members. The trade group’s membership comprises more than 65,000 businesses nationwide.
On Dec. 16, 2025, a panel of the U.S. Court of Appeals for the Eleventh Circuit reversed the ruling in Yellen, holding that the CTA is constitutional.4 The Eleventh Circuit found that “by effectively prohibiting anonymous business dealings, the CTA facially regulates economic activities having a substantial aggregate impact on interstate commerce.”5 The Eleventh Circuit held that “as a uniform and limited reporting requirement, the CTA does not facially violate the Fourth Amendment.”6
The Eleventh Circuit further clarified that the Interim Final Rule “still requires foreign companies to report ownership information except as to American owners”7 and remanded the case to the district court for further proceedings consistent with its opinion.
Although the ruling permits CTA enforcement against National Small Business Association members, FinCEN’s Interim Final Rule currently exempts domestic companies and U.S. beneficial owners. Therefore, National Small Business Association members remain precluded from BOI reporting requirements. FinCEN has not issued any statement or guidance regarding the Eleventh Circuit ruling to date.
Final Rule Status
FinCEN accepted comments on its Interim Final Rule through May 27, 2025. In the Interim Final Rule, FinCEN expressly stated that it would “assess the exemptions, as appropriate, in light of [the] comments and intends to issue a final rule this year.”8 FinCEN Director Andrea Gacki reiterated this position in written testimony to Congress on Sept. 9, 2025, confirming FinCEN’s intent to issue a final rule in 2025.
However, in a government status report filed on Dec. 1, 2025, in an appeal currently pending before the U.S. Court of Appeals for the Fourth Circuit,9 FinCEN stated that it “is currently reviewing comments regarding the [I]nterim [F]inal [R]ule as part of its final rulemaking. Although the [I]nterim [F]inal [R]ule stated that FinCEN ‘intend[ed] to issue a final rule this year,’10 FinCEN’s progress has been delayed by various factors, including the recent lapse in appropriations.”
FinCEN has not issued the final rule to date.
Takeaways
The CTA and the Interim Final Rule remain in effect. Domestic and foreign companies may wish to continue monitoring FinCEN guidance, particularly regarding FinCEN’s final rule. Non-exempt foreign reporting companies should continue to comply with BOI filing deadlines, and stakeholders should stay alert for any updates regarding the scope, exemptions, or timing of the forthcoming final rule.
For additional information regarding the CTA and its reporting requirements, visit GT’s CTA Task Force page.
1 On Dec. 3, 2024, the CTA and its Reporting Rule were preliminarily enjoined on a nationwide basis, approximately four weeks ahead of a Jan. 1, 2025, deadline. FinCEN appealed that ruling, and on Dec. 23, 2024, a motions panel of the U.S. Court of Appeal for the Fifth Circuit stayed the injunction, allowing the CTA to go back into effect. Three days later, on Dec. 26, 2024, a merits panel of the Fifth Circuit vacated the motion panel’s stay, effectively reinstating the nationwide preliminary injunction against the CTA and Reporting Rule. On Dec. 31, 2024, the government filed an emergency application with the U.S. Supreme Court to stay that preliminary injunction. On Jan. 23, 2025, the Supreme Court granted that application (SCOTUS Order), staying the nationwide preliminary injunction in Texas Top Cop Shop, Inc. v. Bondi. See McHenry v. Texas Top Cop Shop, Inc., 145 S. Ct. (2025). Then, notwithstanding the SCOTUS Order staying the injunction in Texas Top Cop Shop, on Jan. 24, 2025, FinCEN confirmed that reporting companies were not required to file BOI Reports with FinCEN due to the separate nationwide relief entered in Smith v. U.S. Department of the Treasury (and while the order in Smith remained in effect). No. 6:24-CV-336-JDK, 2025 WL 41924 (E.D. Tex. Jan. 7, 2025). On Feb. 5, 2025, the government appealed the ruling in Smith to the U.S. Court of Appeals for the Fifth Circuit and asked the District Court to stay relief pending that appeal. On Feb. 18, 2025, the District Court in Smith granted a stay of its preliminary injunction pending appeal, thereby reinstating BOI reporting requirements once again. In response, on Feb. 19, 2025, FinCEN announced that the new deadline to file an initial, updated, and/or corrected BOI reports was generally March 21, 2025. On March 2, the U.S. Department of the Treasury issued a press release announcing that it would not enforce any penalties or fines under the CTA against U.S. citizens, domestic reporting companies, or their beneficial owners under the current Reporting Rule (defined infra) or after the forthcoming rule changes take effect.
2 721 F. Supp. 3d 1260 (N.D. Ala. 2024).
3 Id. at 1289.
4 See Nat'l Small Bus. United v. United States Dep't of the Treasury, 31 Fla. L. Weekly Fed. C810 (U.S. 11th Cir. Dec. 16, 2025).
5 Id. at 4.
6 Id.
7 Id. at 8.
8 Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, 90 Fed. Reg. 13688, 13689 (Mar. 26, 2025).
9 Community Associations Institute, Inc. v. Dept. of the Treasury, No. 24-2118, docket item 65.
10 Id. at 13,689.