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If you are a small business owner, you may have heard of the Corporate Transparency Act (CTA) and its burdensome and intrusive Beneficial Ownership Information (BOI) reporting requirements. The CTA took effect this year and requires small businesses and other entities to report personal information to the Financial Crimes Enforcement Network (FinCEN) at the Treasury Department with the goal of combatting money laundering and shell companies. However, this overreaching legislation does very little to prevent crime and instead subjects small business owners to fines of up to $10,000 and two years of jail time for failure to comply.

Here’s the good news…

Last week, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction which temporarily blocks enforcement of the CTA reporting requirements.

The ruling is not a final determination of the CTA’s constitutionality; instead, it temporarily halts enforcement while the case proceeds. Since the injunction applies nationwide, that means all companies subject to the CTA’s reporting requirements are now exempt from filing beneficial ownership reports until further notice.

While the ruling temporarily halts compliance obligations, the final outcome of this case remains uncertain. Businesses should stay informed and proactive as the legal battle over the CTA unfolds.

With all this uncertainty, it’s even more important for Congress to officially delay or repeal these burdensome reporting requirements all together. That’s why I am proud to cosponsor the Repealing Big Brother Overreach Act, which would fully repeal the CTA.

I think we can all agree that small businesses should be able to plant their roots and flourish, not be consumed with hours of ineffective paperwork. 

I will keep you posted as this ongoing legal battle unfolds...