The Corporate Transparency Act (the CTA) is once again in effect after a Texas district court lifted the last remaining block on its enforcement on February 17, 2025, in Smith, et al. v. U.S. Department of the Treasury, et al. 

The Corporate Transparency Act (the CTA) is once again in effect after a Texas district court lifted the last remaining block on its enforcement on February 17, 2025, in Smith, et al. v. U.S. Department of the Treasury, et al.  As a result, most companies subject to the rule, including covered contractors, must comply with a new reporting deadline of March 21, 2025.  Contractors should prepare now—and AGC urges members to share by February 26 their ongoing costs and compliance burdens to strengthen AGC’s legal arguments as it continues fighting the CTA’s constitutionality in court. Stay tuned for further updates.

Several lawsuits are ongoing challenging the constitutionality of the CTA’s requirements regarding beneficial ownership disclosure.

AGC has consistently led opposition to the CTA’s reporting rules.  In February 2022, AGC submitted comments on the proposed regulations, criticizing FinCEN for exceeding its statutory authority and increasing identity theft risks.  AGC urged Congress to enact legislation delaying the implementation of a new law and endorsed legislation to fully repeal the CTA.  Current legislation is pending in the Senate which would further extend that deadline if passed.

AGC Compliance Resources

AGC hosted two webinars on the CTA, one with FinCEN itself, and another with a law firm specializing in CTA compliance. The recording of the latter webinar (free to AGC members, and more informative of the two) is available here. See FinCEN’s Feb. 18, 2025, release for the latest information and details - FinCEN Notice, FIN-2025-CTA1, 2/18/2025.

Litigation Continues; Stay Tuned

AGC has been fighting back in the courts against the CTA rule. The U.S. Court of Appeals for the Fifth Circuit is scheduled to hear oral arguments on April 1 in Texas Top Cop Shop, Inc. v. McHenry – formerly v. Garland. This is a separate lawsuit in a similar case that is also challenging the constitutionality of the CTA.  Texas Top Cop Shop made its way to the U.S. Supreme court earlier this year.  The High Court lifted the preliminary injunction blocking the enforcement of the CTA, holding that the CTA could remain in place pending the outcome of an appeal in the Fifth Circuit. AGC along with AGC of New York State submitted amicus briefs in Fifth Circuit and in the Supreme Court, supporting efforts to stop the government from enforcing the reporting requirements of the CTA and regulations, arguing the CTA is unconstitutional because it regulates beyond Congress’ legislative powers, and laying out the impact to the regulated community.  Now, AGC is readying to file another amicus brief on the merits focused on the ongoing costs and burdens for the construction community to comply with the CTA.  These legal briefs were written pro bono by the law firm Couch White, LLP.  We encourage members to provide input regarding the significant ongoing costs and burdens that will be associated with complying with the CTA if it is implemented nationwide.  We are hopeful that the Fifth Circuit affirms the district court’s nationwide preliminary injunction and reinstates the pause to the CTA and reporting rule.

As reported above, up until a few days ago, FinCEN was still barred from enforcing the law under the court order in Smith v. U.S. Department of the Treasury.  That case had stayed the effective date of the reporting rule that applied to everyone covered by the rule, pending decision on the merits.  But a federal district court granted the government’s request to move ahead, and this week, FinCEN issued a notice that the reporting deadline is set to March 21.

Notably, in a third lawsuit, AGC and other business groups coordinated by the National Federation of Independent Business (NFIB) Legal Center jointly filed an amicus brief in the Eleventh Circuit in support of small business plaintiffs in a similar case, National Small Business Association case. That is the only case in which a district court has decided the ultimate merits of the CTA’s constitutionality (as opposed to ruling in a preliminary-injunction posture), though that decision does not have nationwide effect and provides relief only to the plaintiffs (i.e., members of the NSBA).