The Corporate Transparency Act lawsuits have produced conflicting federal court rulings, a Supreme Court intervention, and a pending petition for certiorari, but the most important development for business owners came from the Treasury Department itself: under a March 2025 interim rule, only foreign entities registered to do business in the United States still have to file beneficial ownership reports. Domestic companies and U.S. persons are exempt for now, though that exemption sits on regulatory discretion rather than statute, and the underlying constitutional fight is still moving through the courts.
Do You Have To File Right Now
If your company was formed in the United States, or if you are a U.S. person who owns or controls a reporting company, you are not currently required to file with FinCEN. The March 21, 2025 interim final rule exempted “over 99 percent of entities that previously were required to report,” according to the Government Accountability Office.
Foreign entities registered to do business in the U.S. remain covered. And the National Federation of Independent Business has warned that the exemption for domestic companies is a regulatory choice that a future administration could reverse without changing the statute.
The Alabama Case: NSBA v. Yellen
The first successful challenge came from the National Small Business Association and one of its members, Isaac Winkles, in the Northern District of Alabama. On March 1, 2024, Judge Liles C. Burke ruled that incorporating a business under state law is a “purely domestic” activity Congress cannot reach through the Commerce Clause, and he rejected the government’s arguments that foreign affairs powers or the taxing power justified the CTA.
The injunction was narrow. It covered only Winkles, the NSBA, and NSBA members as of the ruling date. FinCEN kept enforcing the law against everyone else while the Justice Department appealed to the Eleventh Circuit.
On December 16, 2025, a unanimous Eleventh Circuit panel reversed Judge Burke and upheld the CTA. The appeals court found the law regulates “economic activity” — the ownership and maintenance of corporate entities — and that Congress had a rational basis to conclude anonymous corporate dealings have a “substantial aggregate impact on interstate commerce.” The panel also rejected a Fourth Amendment challenge, calling the reporting requirements “uniform, limited in nature, and reasonable.” Arguments based on the First, Fifth, Ninth, and Tenth Amendments were treated as abandoned because they were not adequately briefed on appeal.
The Texas Injunctions and the Supreme Court
A broader challenge came in the Eastern District of Texas. In Texas Top Cop Shop, Inc. v. Garland, filed May 28, 2024 by the NFIB, the Libertarian Party of Mississippi, and several small businesses, Judge Amos Mazzant issued a nationwide preliminary injunction on December 3, 2024, finding the CTA “likely unconstitutional.” He held that the law does not regulate existing interstate commerce but instead compels new activity, and that the Necessary and Proper Clause did not save it because the connection to the taxing power was “tenuous at best.”
What followed was a rapid back-and-forth on appeal:
- December 23, 2024: A Fifth Circuit motions panel lifted the injunction, temporarily reinstating the reporting requirements.
- December 26, 2024: A different Fifth Circuit merits panel vacated that order and reinstated the nationwide injunction to “preserve the constitutional status quo.”
- January 23, 2025: The U.S. Supreme Court stayed the injunction pending the Fifth Circuit’s merits ruling. Justice Ketanji Brown Jackson dissented, arguing there was no urgent situation warranting the Court’s intervention.
The Supreme Court’s stay did not actually restart enforcement, because a second nationwide injunction was already in place. On January 7, 2025, a different Eastern District of Texas judge issued an injunction in Smith v. United States Department of the Treasury. FinCEN confirmed that companies faced no liability for failing to file while the Smith order stood. On February 17, 2025, the Smith court stayed its own injunction, explicitly noting it was “not a decision on the merits” but was influenced by the Supreme Court’s handling of Texas Top Cop Shop.
With both injunctions stayed, FinCEN announced on February 19, 2025 that reporting was back in effect, with a new compliance deadline of March 21, 2025. The Fifth Circuit scheduled oral arguments in Texas Top Cop Shop for March 25, 2025. As of mid-2026, no published merits ruling from the Fifth Circuit has been identified in public records.
The Treasury Rule That Changed Everything
The revival of the reporting requirement lasted about a month. On March 21, 2025, the same day as the new compliance deadline, FinCEN published an interim final rule that exempted all entities created in the United States and all U.S. persons from beneficial ownership reporting. Only foreign entities registered to do business in the U.S. remained covered.
The GAO reported that the rule covered “over 99 percent of entities that previously were required to report.” In a 2026 report, the GAO recommended that the Treasury Secretary direct FinCEN to identify actions to address the resulting information gaps. Treasury disagreed with the recommendation, and as of May 2026, no steps had been taken.
The FACT Coalition called the rule an “illegal move” that “contradicts years of extensive evidence” and “defies congressional intent,” and on May 27, 2025 submitted formal comments demanding withdrawal, joined by Senators Sheldon Whitehouse and Chuck Grassley, the National District Attorneys Association, and other groups.
The Supreme Court Petition
On April 15, 2026, the NSBA filed a petition for certiorari asking the Supreme Court to decide whether the CTA is constitutional. The organization retained former U.S. Solicitor General Paul Clement to lead the challenge. A grant of review would let the Court resolve the tension between the Eleventh Circuit’s decision upholding the law and the Texas district court rulings finding it unconstitutional, though no formal circuit split exists yet because the Fifth Circuit has not ruled on the merits.
Transparency International U.S. Deputy Executive Director Scott Greytak said the Eleventh Circuit ruling “put the Corporate Transparency Act back on firm legal footing” and rejected the idea that “corporate secrecy is a protected right.” The group also argued that Treasury’s domestic exemption is “a policy choice — not a legal necessity.”
Congressional Repeal Efforts
Congress is working a parallel track. Senator Tommy Tuberville introduced S. 100, the “Repealing Big Brother Overreach Act,” on January 15, 2025, drawing 34 cosponsors, almost all Republican. An identical House bill, H.R. 425, was ordered reported by the House Financial Services Committee on April 21, 2026 by a 26 to 25 vote. The committee version would amend the statute to apply only to foreign beneficial owners and require FinCEN to delete previously collected information about U.S. persons within 90 days.
A separate Senate bill, S. 4419, from Senators Mike Lee and John Kennedy with eight additional Republican cosponsors, would similarly narrow the definition of “reporting company” to exclude domestically created entities and require deletion of U.S. persons’ data.
The NFIB argues legislative repeal is the only durable protection because the current exemption could be reversed by a future administration. The FACT Coalition and the Main Street Alliance argue repeal would permanently eliminate a tool law enforcement considers essential for tracking illicit money.
What Could Change The Answer
Three tracks could restore filing obligations for domestic companies. FinCEN could withdraw or narrow the March 2025 interim rule, either on its own or under a new administration. The Supreme Court could grant certiorari and uphold the CTA, which would settle the constitutional question but not by itself reverse the regulatory exemption. And the Fifth Circuit could still issue a merits ruling in Texas Top Cop Shop or Smith that shapes how any restored requirement is enforced.
For now, domestic entities and U.S. persons have no filing duty under the CTA. Foreign entities registered in the United States do. Watch FinCEN rulemaking and the Supreme Court’s cert docket for the next signal that the answer has changed.