WASHINGTON — A court ruling has blocked the U.S. Department of Treasury from enforcing the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements, reports the National Federation of Independent Business (NFIB).
The U.S. District Court for the Eastern District of Texas granted NFIB’s request for a preliminary injunction in its decision in the case “Texas Top Cop Shop Inc. et al v. Garland, et al.”
The CTA, a bipartisan law enacted this year to curb illicit finance by supporting law enforcement efforts, requires many small businesses to report basic information to the Federal government about the real people who ultimately own or control them.
Companies created before 2024 were directed to file the required information by Jan. 1 or possibly face severe civil and/or criminal penalties.
“This ruling is a huge victory for small businesses nationwide, and just in time,” says Beth Milito, executive directory of NFIB’s Small Business Legal Center. “For many Main Street small businesses, they were a mere four weeks away from the deadline to file their information in accordance with the CTA.
“The BOI reporting requirements are a harmful invasion of small-business owners’ privacy and a misuse of their valuable time. Thankfully, the Court agreed and granted a preliminary injunction, giving small-business owners a reprieve from this burdensome rule.”
NFIB’s lawsuit argues that the CTA is unconstitutional in that it exceeds Congress’ authority over the states, improperly compels speech and contradicts the right of anonymous association guaranteed by the First Amendment, and violates the Fourth Amendment by forcing the disclosure of private information.
NFIB partnered with The Center for Individual Rights (CIR) and filed the lawsuit with the Texas Top Cop Shop, Data Comm for Business, Mustardseed Livestock, Russell Straayer, and the Libertarian Party of Mississippi.
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