Fifth Circuit Reverses Course, Blocks Government Enforcement of Burdensome Beneficial Ownership Reporting For Small Businesses – NFIB

WASHINGTON, D.C. (Dec. 27, 2024) – The National Federation of Independent Business (NFIB) applauds the new decision by the U.S. Court of Appeals for the Fifth Circuit in NFIB’s lawsuit challenging the Corporate Transparency Act (CTA), Texas Top Cop Shop, Inc., et al. v. Garland, et al. The court’s latest decision reinstates the nationwide injunction, blocking the burdensome beneficial ownership information (BOI) reporting requirements for small businesses while the court fully considers the government’s appeal. It also nullifies a previous Fifth Circuit order that allowed the government to begin enforcing the CTA and BOI reporting requirements again.  

“The court’s reinstatement of the nationwide injunction is a welcome sigh of relief for small businesses,” said Rob Smith, Senior Attorney of NFIB’s Small Business Legal Center. “Since being told earlier this week that they must urgently submit their BOI reports, our nation’s small businesses have experienced enormous chaos and confusion. Thankfully, the court’s latest decision recognizes that the CTA and BOI reporting requirements pose serious constitutional questions. It also provides Main Streets across the country with a reprieve from this harmful mandate while our lawsuit proceeds.”

Earlier this month, the U.S. District Court for the Eastern District of Texas granted NFIB’s request for a preliminary injunction, preventing the U.S. Department of Treasury from enforcing the CTA and BOI reporting requirements. On December 23, the U.S. Court of Appeals for the Fifth Circuit blocked that injunction, which allowed the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to enforce the CTA and its BOI reporting requirements.

If not fully repealed or found unconstitutional, 32 million small businesses throughout the country will once again be subjected to this burdensome statute, including the nearly 300,000 NFIB member businesses represented in this lawsuit. NFIB supports the Repealing Big Brother Overreach Act, legislation that would repeal the CTA and permanently relieve small businesses of the BOI reporting requirements.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.