We previously shared updates regarding the Corporate Transparency Act (“CTA”), most recently reporting that the injunction against enforcement of the CTA was overturned and deadlines for most filers were extended to January 13, 2024. We have yet another change to report. Late December 26, 2024, a panel for the Fifth Circuit Court of Appeals reinstated the injunction until it can hear oral arguments from the parties and issue a ruling on the government’s appeal of the original injunction. We anticipate a ruling and more updates in early January.  In the meantime, we continue recommend all parties required to file under the CTA should be prepared to file on short notice after the court’s ruling provides more clarity. We will continue to monitor the situation and share updates as they become available. Sims & Campbell, LLC- Annapolis and Towson Estate Planning Attorneys

This afternoon (December 23, 2024), the United States Court of Appeals for the Fifth Circuit reinstated the enforceability of the Corporate Transparency Act (CTA) effective immediately. In Texas Top Cop Shop, Inc. v. Garland, a three-judge panel of the Fifth Circuit stayed a lower court’s nationwide preliminary injunction against the CTA, which was issued on December 3, 2024. This means that, among other obligations, the January 1, 2025, compliance deadline for reporting companies in existence as of January 1, 2024, is back in effect. This situation is likely to rapidly evolve. It is entirely likely that in the coming days, the challengers in this case will seek further review from the Fifth Circuit or seek relief from the United States Supreme Court. Additionally, several other federal courts are actively considering challenges against the CTA. At the time of this writing the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has not publicly released any guidance based on today’s ruling. We will continue to monitor this development closely and provide updates as they become available. For clients concerned about the implications of this ruling on their business or estate planning, please feel free to contact us. Sims & Campbell, LLC- Annapolis and Towson Estate Planning Attorneys

A recent ruling by the U.S. District Court for the Eastern District of Texas has preliminarily blocked the nationwide enforcement of the Corporate Transparency Act (CTA). This decision impacts businesses nationwide, as the CTA aimed to require U.S. business entities to report stakeholder information to the Treasury Department to combat money laundering and other illicit activities through shell companies. The injunction was issued in response to a lawsuit by Texas Top Cop Shop Inc. and co-plaintiffs, arguing that the CTA oversteps Congress's constitutional authority to regulate commerce, especially since it applies to entities regardless of their engagement in commercial activities. This ruling halts the implementation of these reporting requirements temporarily, pending further legal proceedings, which could have significant implications for estate planning and business privacy. As a result, individuals are no longer required to file but that may change in the future based on court decisions and agency regulations.We will continue to monitor this development closely and provide updates as they become available. For clients concerned about the implications of this ruling on their business or estate planning, please feel free to contact us. [For further reading on the CTA and its implications, see the article here: https://news.bloombergtax.com/daily-tax-report/corporate-transparency-act-blocked-nationwide-by-texas-court ] Sims & Campbell, LLC- Annapolis and Towson Estate Planning Attorneys  

Effective January 1, 2024, the Corporate Transparency Act (the “CTA”) will implement beneficial ownership information reporting requirements for corporations, limited liability companies and other business entities that were created in or are registered to do business in the United States. The CTA requires that certain information about the business’ owners be provided to the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and imposes significant penalties for noncompliance. The purpose of the CTA, which is part of a broader effort by FinCEN to try to crackdown on illegal activity such as money laundering, corruption, tax fraud and terrorist financing, is to provide greater transparency of owner information to try to prevent criminals from hiding illegal property in the United States. Who is required to file? Corporations, limited liability companies and other business entities that were created by a filing with a secretary of state or a similar office to create the entity or, for foreign companies, a registration to do business in the United States. The CTA contains 23 exemptions, mostly for large companies, such as publicly traded corporations, and businesses that the federal government heavily regulates, as these companies are already providing the information to the government. Limited liability companies created for estate planning purposes must comply with the CTA. What to file? A business that is required to report beneficial ownership information under the CTA (called a “reporting company”) will be required to provide: legal name and any trade name or dba; address; jurisdiction in which it was formed or first registered, depending on whether it’s a U.S. or foreign company; and taxpayer identification number. For each reporting company’s beneficial owners and each reporting company applicant, the following information with respect to individual owners will also be required: legal name; birthdate; address (in most cases, a home address); and an identifying number from a driver’s license, passport or other approved document for each individual, as well as an image of the document that the number is from. There can be up to two individuals who qualify as a reporting company’s applicants: the individual who directly files the document that creates, or first registers, the reporting company; and the individual that is primarily responsible for directing or controlling the filing of the relevant document. A reporting company is only required to report company applicants if it is created or registered on or after January 1, 2024. When to file? A reporting company created or registered before January 1, 2024 is required to file before January 1, 2025. A reporting company created or registered on or after January 1, 2024 is required to file within 30 calendar days of receiving actual or public notice that the company has been created, or upon receipt from your state’s secretary of state or similar office that the company was created or registered, whichever is earlier. FinCEN has reported that it will accept reports electronically beginning January 1, 2024. There is a proposal to extend the time to file for the first year…