National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.). Still have to Report!

We will provide a more in-depth analysis of this court case, but we wanted to let everyone know that while this court case does hold the Corporate Transparency Act (CTA) unconstitutional, it doesn’t enjoin FinCEN from enforcing the CTA, except as it relates to the plaintiffs (i.e. the people and organizations who brought this specific lawsuit).

Full text of the case is available here.

Here’s what FinCEN says about the case:

On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a final declaratory judgment, concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs. FinCEN is complying with the court’s order and will continue to comply with the court’s order for as long as it remains in effect. As a result, the government is not currently enforcing the Corporate Transparency Act against the plaintiffs in that action: Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024). Those individuals and entities are not required to report beneficial ownership information to FinCEN at this time.

We are actively working with constitutional scholars to challenge the CTA, but it’s our opinion the National Small Business United v. Yellen is not properly decided and will be overturned in appeal. We do see successful challenges to the CTA in the future, but we don’t believe the CTA is ever going to go away for good — we see the law being scaled back.