On Dec. 5, 2024, two days after the Texas federal court issued its ruling, the DOJ filed a formal notice of appeal, challenging its injunction of the CTA.

FT. LAUDERDALE, Fla., Dec. 8, 2024 /PRNewswire-PRWeb/ -- On December 5, 2024, just two days after the Texas federal court issued its December 3, 2024, ruling, the Department of Justice filed a formal notice of appeal to the Fifth Circuit. This notice of appeal indicates a swift challenge to the court's preliminary injunction that temporarily halts nationwide enforcement of the Corporate Transparency Act (CTA). Merrick Garland, et al. (Case No. 4:24-cv-00478)>

The appeal notice also indicates that the Department of Justice promptly seeks a stay of the injunction. While the injunction remains in effect, FinCEN is unable to enforce the CTA or impose any penalties for non-compliance.

However, the Fifth Circuit could quickly revise the scope of the injunction prior to the regulation's January 1st deadline while the appeal is under review. This could potentially limit the injunction's application to named plaintiffs or a smaller group of businesses or stay the injunction entirely, allowing FinCEN to enforce the Corporate Transparency Act nationwide.

The Fifth Circuit will evaluate any upcoming DOJ motion based on factors such as:

Likelihood of Success on the Merits: Whether the government's appeal has a strong chance of overturning the injunction.

Irreparable Harm: Whether allowing the injunction to remain would cause significant harm to the government or public interest.

Balance of Harms: Whether the harm to the government outweighs the harm to the plaintiffs.

Public Interest: Whether staying or maintaining the injunction aligns with the broader public interest or national security.

Many firms are choosing to continue collecting client information and preparing BOI reports in anticipation of a possible stay of the injunction, which could reinstate the original January 1, 2025, filing deadline. Stays pending appeal are often decided quickly, especially in high-profile cases involving federal enforcement. A decision could come within days or weeks. If this happens, firms that have not collected the necessary information from clients in advance may face delays or challenges in filing reports before a reinstated deadline.

Similar cases, including the Firestone v. Yellen decision in Oregon (September) and the CAI v. Yellen case in Virginia (October), saw courts deny injunctions, offering a precedent that suggests the Texas ruling may also face similar outcomes.

FincenFetch remains committed to providing ongoing updates and filing solutions for firms and businesses during this uncertain period. We are closely monitoring the Department of Justice's appeal to keep firms and businesses updated. Businesses can rely on FincenFetch to stay prepared and informed as developments unfold.

For more information on how we can help you navigate the ongoing changes to the Corporate Transparency Act filing requirements, visit FincenFetch.

Media Contact

Monica Stoneking, FincenFetch, 1 7604739038, monica@fincenfetch.com, FincenFetch

Monica Stoneking, FincenFetch, monica@fincenfetch.com, www.FincenFetch.com

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SOURCE FincenFetch; FincenFetch