District Judge Amos L. Mazzant of the Eastern District of Texas issued a preliminary injunction ordering that the entire Corporate Transparency Act (CTA) is enjoined nationwide and that the US government in enjoined from enforcing the BOI Reporting Rule (the final rule implementing the CTA and providing definitions and guidance for the statute) and the Jan. 1, 2025, compliance deadline. Judge Mazzant decided yesterday to reject the government’s motion to reverse himself. It’s difficult to cause a Judge to reverse himself, so the government moved the Fifth Circuit Court of Appeals to take emergency action and reverse Judge Mazzant.

The government’s motion to the Fifth Circuit is pending with a briefing schedule that could result in a decision around Christmas. The government asked the Court to render a decision by December 27th, but it’ll be up to the Court. The government asked for a complete reversal on the nationwide injunction by Judge Mazzant, or at least an order limiting the injunction to the parties involved in that case, or just the members of the organization involved in the case.

If the injunction is lifted by the Fifth Circuit, organizations will have to go back to complying with the CTA and its looming January 1, 2025 deadline. FinCEN has not indicated whether it will extend the deadline if the injunction is lifted.

We will keep you posted of developments. For now, although the nationwide preliminary injunction relieves the immediate obligation – i.e., right now – to file beneficial ownership reports with FinCEN, it would be prudent for non-exempt reporting entities that haven’t yet filed to continue to prepare for their report filing by continuing to gather all information and documents that the CTA requires. If it turns out that compliance is not required, then they don’t have to submit their report to FinCEN, but if they do and FinCEN does not give a reasonable time thereafter for compliance, then reporting companies don’t have to scramble at the last minute to comply before the hefty $591 a day fines kick in.

Here Judge Mazzant’s decision refusing to reverse himself and the government’s motion to the Fifth Circuit.