U.S. District Court Ruling Causes Uncertainty For CTA Enforceability

On March 1, 2024, the U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act ("CTA") exceeded Congress's Constitutional authority, and accordingly prohibited the Treasury Department from requiring some small businesses to disclose personal details about their owners back to the Department's enforcement arm. See, National Small Business United v. Janet Yellen, in her official capacity as Secretary of the Treasury (Case No. 5:22-cv-1448-LCB) (March 1, 2024).

The Court has not yet ruled on a nationwide injunction and it is expected that the Treasury Department will ask the Justice Department to appeal the ruling to the U.S. Court of Appeals for the Eleventh Circuit. Pending this appeal, it is not clear if the Treasury Department will enforce the CTA against non-parties to the lawsuit. A Treasury Department spokeswoman noted that the agency was "complying with the court's injunction," but referred all other inquiries to the