Taylor Legal Blog

The Corporate Transparency Act is Unconstitutional? Says Who?? [VIDEO]

Posted by Katherine L. Taylor, Attorney and CPA, Chief Problem SolverMay 30, 20240 Comments

{2 minutes to read}  Are you a business owner preparing to comply with the Corporate Transparency Act, and ended up putting all that effort on hold because you just heard that the Act was declared unconstitutional? If so, let me explain why you should keep planning to comply with the Corporate Transparency Act.

On March 1st, 2024, which is only less than two months ago, the United States District Court for the Northern District of Alabama held that the Corporate Transparency Act, which is a Federal Act, is unconstitutional and barred enforcement of that Act by FinCEN against the plaintiffs in the case. That court decision only affects the plaintiffs, not anybody else, thinking they are now not required to comply with the Corporate Transparency Act. The good news or the bad news, however you want to look at it, is that that decision will most likely be appealed and will first go to the 11th Circuit Court of Appeals, which only covers Alabama, Georgia, and Florida. That decision will probably be appealed to the Supreme Court of the United States, which will affect almost every business in the United States. At this point, the case isn't even at the Supreme Court, and thus, the Supreme Court hasn't decided the case, so it only applies to the plaintiffs in that case. When that case was first decided, there was talk as to whether FinCEN, the government agency responsible for implementing and enforcing the Act, would issue some guidance. Up until this point, there has been no guidance issued by FinCEN. Nor has Congress acted in any way to indicate that it will change the law. So again, until the Supreme Court acts, until FinCEN issues guidance, or until Congress acts, that Act will apply to most businesses in the United States.

Check out the other videos in this series about the Corporate Transparency Act, where I describe who has to comply, how you comply, and what the deadlines are for complying.