The U.S. Court of Appeals for the Fifth Circuit has overturned a previous order that blocked the enforcement of Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). This decision affects a lawsuit brought by the National Federation of Independent Business (NFIB), Texas Top Cop Shop, Inc., et al. v. Garland, et al.
Earlier in December, the U.S. District Court for the Eastern District of Texas had issued a nationwide preliminary injunction preventing the U.S. Department of Treasury from enforcing these requirements. The new ruling allows the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to proceed with enforcing BOI reporting as NFIB's lawsuit continues.
Beth Milito, Executive Director of NFIB’s Small Business Legal Center, expressed concerns about the impact on small businesses: “Because of this decision, small business owners must scramble to meet the reporting requirements of this egregious statute. Enforcing a Jan. 1 deadline for compliance will mean massive chaos for our nation’s small businesses.” She added that NFIB is working swiftly to appeal what she termed a "terrible decision" and seek relief for affected businesses.
Over 32 million small businesses across the United States will be impacted by this ruling, including nearly 300,000 NFIB member businesses involved in the lawsuit. NFIB backs legislation known as the Repealing Big Brother Overreach Act, which aims to repeal the CTA and permanently eliminate BOI requirements for small businesses.
The NFIB Small Business Legal Center remains active in defending small business rights across more than 40 cases at various judicial levels, including federal and state courts and the U.S. Supreme Court.
