Corporate Transparency Act – In Appeal of Remaining Nationwide Injunction, Government Would Allow Grace Period and Possible Modification of CTA Reporting Requirements

On February 5, 2025, the United States Department of the Treasury filed an appeal with the United States District Court for the Eastern District of Texas for a stay of the court’s order granting a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) in Smith v. U.S. Department of the Treasury. Among its arguments, the government cited the ruling of the United Stated Supreme Court in the Texas Top Cop Shop case which granted a stay of a nationwide preliminary injunction that had halted the enforcement of the CTA issued by a different district court in the Eastern District of Texas.

Notably, in its appeal, the Government indicated that if the stay is granted, FinCEN would extend a thirty-day grace period for compliance with the CTA, and also would possibly modify the CTA’s reporting requirements, specifically noting:

“If the stay is granted, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) intends to extend the Corporate Transparency Act (CTA) compliance deadline for thirty days. During that period, FinCEN will assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities while prioritizing enforcement to address the most significant risks to U.S. national security.”

We are following the developments relating to Smith v. U.S. Department of the Treasury, as well as the Texas Top Cop Shop case, and plan to provide further updates. If you have any questions related to the CTA or the recent rulings, please reach out to your SGR attorney or any of the individuals listed below.

Tom Hong (Atlanta/Austin/Charlotte)
Brett Lockwood (Atlanta/Austin/Charlotte)
Eric Breitman (New York/Washington D.C.)
Ken Crane (Chicago)
Adam Buss (Jacksonville/Miami/Tampa)
Peter Rho (Los Angeles)
Ben Graham-Evans (London)
Michael Kraus (Atlanta – German Practice)
Stefan Buske (Munich)
Nicola Fiordalisi (Milan – Italian Practice)

To read more about the CTA, CLICK HERE.

***Updated as of February 6, 2025