A new rule that narrows the scope of the Corporate Transparency Act to exclude domestic entities from its reporting requirement require a pause in the case and additional briefing about the rule’s impact.
The US Court of Appeals for the Fifth Circuit ordered both the Treasury Department and the plaintiffs in Texas Top Cop Shop v. Bondi to file simultaneous letter briefs addressing the March 21 interim rule, which largely removes the requirements of the act on domestic companies and beneficial owners. The briefs are due April 8 at 5 pm, according to the order.
- The CTA originally required 32 million American business entities to report information on beneficial owners to the Financial Crimes Enforcement Network, but Treasury removed the requirements for domestic entities to focus on foreign-created ones
- The plaintiffs argued that the act exceeded federal power, but the government has disputed that while simultaneously rolling the Act back
- Oral arguments at the Fifth Circuit were scheduled for April 1, but have been delayed with no new date set; meanwhile the interim rule will go through notice-and-comment procedures for public feedback
The Center for Individual Rights and Baker Hostetler LLP represent Texas Top Cop Shop.
The case is Texas Top Cop Shop Inc. v. Bondi, 5th Cir., No. 24-40792, court directive issued 3/24/25.
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