You Don’t Need To File With FinCen At This Time
This week we are discussing the recent ruling by a Texas judge that the Corporate Transparency Act is unconstitutional.
You can watch the video here:
One attorney, Jeff Watson, sent out the following in an email that I received:
On December 3, 2024, a federal judge for the U.S. District Court for the Eastern District of Texas (Sherman Division) issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA). A federal judge has the authority to determine if a law passed by Congress is unconstitutional, meaning it exceeds the scope of authority given to Congress as to regulating things that happen inside a state.
In addition to determining that the law is unconstitutional, the judge granted a preliminary injunction, which means he stopped the requirement for people to file their beneficial ownership interest reports under the CTA.
If you remember, I told you in a recent email on this topic that I was waiting until after the election and after the week of December 9th to file the information for my entities because I was hoping we would see a federal judge with the courage to declare the CTA unconstitutional and issue an order like this, and that is precisely what happened on December 3rd in Texas.
In a 79-page decision, this judge determined that Congress does not have the authority to pass such legislation influencing how states regulate and allow the operation of businesses. He went on to say that the decision applied to all businesses in the United States, and that the entire process must stop.
If you have not yet filed under the CTA, there is no need to do so. The court did not address what will happen with the information already filed by those who reported. I know that I had to report for one entity already because of the timelines. I suspect that after January 20, 2025, when we have a new Attorney General of the United States, the Department of Justice will receive different instructions as to how to move forward with these cases. I expect the CTA to eventually go away completely.
If there are any new details regarding this, I will let you know, but for now, the good news is you do not have to file under the CTA!
Your comments and brief questions are appreciated. I read every one and will do my best to briefly respond. If you like this article, please feel free to share it on social media or otherwise and encourage your friends to go to WatsonInvested.com to sign up so they can receive their own emails.
Thanks to Jeff Watson for providing that information. If you have not already done so, I would encourage you to sign up for his newsletter in the link above.
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Mike is a retired aerospace engineer with a passion for real estate investing and teaching financial literacy. He lives with his wife in Daytona Beach, Florida.
