Lawmakers Fail To Delay CTA Reporting Deadline, But Nationwide Injunction Still In Effect

On Dec. 18, the Metals Service Center Institute (MSCI) and more than 100 other trade associations sent a letter to U.S. lawmakers asking them to approve a fiscal year 2025 continuing resolution bill that included language to delay the Corporate Transparency Act’s (CTA) reporting deadline. The letter, which is available here, argued a one-year delay was necessary to provide much needed relief and certainty to businesses, give federal regulators more time to work with affected entities, and allow various legal challenges to the rule to make their way through the courts.

As Connecting the Dots has reported several times, the CTA, enacted by Congress in 2020, mandates that, by Jan. 1, 2025, companies that earn $5 million or less in revenue and employing 20 or fewer individuals must file beneficial ownership reports with the Financial Crimes Enforcement Network (FinCEN), an entity within the U.S. Department of the Treasury.

FinCEN had estimated more than 32 million businesses would be affected by the new law by the reporting deadline, with an additional six million affected each subsequent year as new businesses are formed. Despite the looming deadline, as of December 1, 2024 — just one month before a year-end deadline — FinCEN had received less than 30 percent of the required filings. This low reporting rate highlights the stark education gap when it comes to the compliance obligations mandated by the CTA.

Unfortunately, despite MSCI and its allies’ best efforts, the final continuing resolution approved by Congress and signed into law by President Joe Biden this past weekend did not delay CTA implementation.

The good news is that CTA reporting requirements are currently blocked due to a nationwide preliminary injunction granted by a federal court in Texas, so companies that have not filed their beneficial reports already do not have to do so by Jan. 1, 2025. That ruling is currently being appealed, however, so MSCI and its advocacy allies will continue to fight for legislative language in the new Congress, which begins Jan. 6, 2025, to formally delay the CTA reporting deadline.

Stay tuned to Connecting the Dots for updates.