Update: FinCEN Corporate Transparency Act (“CTA”) - Fifth Circuit Request for Rehearing

By: William L. Bricker, Jr.

As we reported on December 24, 2024. FinCEN Corporate Transparency Act (“CTA”) reporting was reinstituted by a decision of the Federal Court of Appeals for the Fifth Circuit on December 23, 2024, in Texas Top Cop Shop, Inc. v. Garland. Within hours of the Court of Appeals decision, FinCEN announced that most reporting entities and individuals must now report under the CTA by January 13, 2025, some 3 weeks after the decision and one week before January 20, 2025, Inauguration Day.

As we anticipated,[1] In a December 24 motion, the plaintiff in Texas Top Cop Shop Inc. asked that the Fifth Circuit “expedite circulation and consideration of their rehearing petition to provide a ruling no later than January 6, 2025.” They claim that the deadline is needed to give “sufficient time, if necessary, to seek relief from the Supreme Court.”

They requested that the Fifth Circuit sit as a full court to determine if an injunction that previously prevented enforcement of the act should be reinstated. The plaintiffs also filed December 24 an emergency petition for an en banc rehearing, claiming that the decision to stay the injunction directly conflicts with National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), in which the Supreme Court determined that the commerce clause was not sufficient authority to support the individual health insurance mandates in the Affordable Care Act.

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[1] We stated that additional actions could include:

1. A request that the entire Fifth Circuit sitting en banc reconsider the decision of the 3-judge panel, especially since the 3-judge panel did not decide the underlying CTA issues.

   
   

2. There is still an appeal of a lower court decision pending before the Court of Appeals for the Eleventh Circuit. Particularly, a contrary decision by that Eleventh Circuit could result in the United States Supreme Court agreeing to consider the matter and enjoining the enforcement of the CTA pending its review.

   
   

3. An effort to have the incoming Trump Administration address the issue.