Corporate Transparency Act Update: BOI Reporting Suspended After Federal Court Rulings

The Corporate Transparency Act's Beneficial Ownership Information reporting requirements are currently suspended for domestic companies. After a series of federal court rulings, a nationwide injunction, and a policy reversal by the Treasury Department, the law that was set to require millions of small businesses to submit personal identification to a federal database is, for now, on hold.

This article covers the current enforcement status as of April 2026, the court decisions that led to the suspension, the constitutional arguments raised by legal experts, a related FinCEN rulemaking on real estate ownership reporting, and what LLC owners may want to consider doing right now.

What the Corporate Transparency Act Set Out to Do

The Corporate Transparency Act was enacted as part of the Anti-Money Laundering Act of 2020, included within the National Defense Authorization Act for Fiscal Year 2021. It was signed into law in January 2021 with the stated goal of combating illicit finance, including money laundering, terrorist financing, and the use of anonymous shell companies to conceal criminal activity.

The CTA directed the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of the Treasury, to build a national registry of beneficial ownership information for certain companies operating in or registered in the United States.

Under the CTA's framework, "reporting companies" — which includes most LLCs, corporations, and similar entities formed by filing a document with a secretary of state — were expected to file a Beneficial Ownership Information (BOI) report with FinCEN. For each beneficial owner (generally, anyone who exercises substantial control over the company or owns 25% or more of its interests), the report would require a full legal name, date of birth, residential address, and an identifying number from a government-issued photo ID, along with an image of that document.

Certain large, heavily regulated entities — publicly traded companies, banks, insurance companies, and businesses with more than 20 full-time employees and over $5 million in gross receipts — were exempt. But the vast majority of small LLCs and corporations formed in any state, including Wyoming, would have fallen under the reporting requirement.

The Federal Court Rulings That Halted Enforcement

The CTA faced legal challenges almost immediately after FinCEN finalized its reporting rule. Two cases reshaped the enforcement landscape entirely.

National Small Business United v. Yellen (N.D. Alabama, 2024)

In March 2024, Judge Liles C. Burke of the U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act is unconstitutional. The case, National Small Business United v. Yellen, was brought by the National Small Business Association and one of its members.

Judge Burke held that the CTA exceeds Congress's enumerated powers under the Constitution. The court rejected the government's arguments that the law was authorized under the Commerce Clause, the Taxing Clause, the Necessary and Proper Clause, or Congress's foreign affairs and national security powers.

The Court finds that the CTA exceeds the Constitution's limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress's policy goals. — Judge Liles C. Burke, National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala. Mar. 1, 2024)

The government appealed to the Eleventh Circuit Court of Appeals. While the Alabama ruling was initially limited in scope to the plaintiff organization's members, it raised serious constitutional questions about the law's foundation.

Texas Top Cop Shop v. Garland (Fifth Circuit, 2024)

The case that effectively halted enforcement nationwide was Texas Top Cop Shop, Inc. v. Garland. In December 2024, the U.S. Court of Appeals for the Fifth Circuit issued a nationwide preliminary injunction barring FinCEN from enforcing the CTA's beneficial ownership reporting requirements against any party.

The Fifth Circuit's ruling went beyond the Alabama decision. Rather than limiting relief to the specific plaintiffs, the court blocked enforcement across the entire country, finding that the plaintiffs were likely to succeed on the merits of their constitutional challenge.

The government has not identified a sufficiently close nexus between the CTA and any specific enumerated power. The CTA is not a tax. It is not a regulation of the channels or instrumentalities of interstate commerce. It is a novel federal mandate that reaches purely intrastate activity — the formation and operation of entities under state law. — U.S. Court of Appeals for the Fifth Circuit, Texas Top Cop Shop, Inc. v. Garland, No. 24-40792 (5th Cir. Dec. 2024)

Current Status: Enforcement Suspended, Domestic Companies Exempted

Following the Fifth Circuit's nationwide injunction, FinCEN announced that it would not enforce the CTA's beneficial ownership reporting requirements while legal challenges are pending. The Treasury Department went further, issuing an interim final rule that removes the filing requirement for domestic reporting companies.

As of April 2026, the current framework is:

• Domestic companies (LLCs, corporations, and similar entities formed in any U.S. state) are not currently required to file BOI reports
• No penalties are being assessed against any company for not filing
• FinCEN's BOI filing system remains available for voluntary submissions, but mandatory reporting from domestic entities has been suspended
• The Treasury Department has stated it intends to issue a revised proposed rule that may apply reporting requirements only to foreign reporting companies

What Legal Experts Are Saying

The CTA has generated significant discussion among attorneys and tax professionals who work with small business owners. While the court rulings speak for themselves, several legal experts have offered analysis that may help business owners understand the broader implications.

Constitutional Concerns

Real estate attorney Clint Coons, Esq. of Anderson Advisors has argued that the CTA represents an unprecedented expansion of federal reporting requirements for small business owners. In his educational content on the subject, Coons has raised concerns about the scope of the law and its potential to reach entities that operate entirely within a single state — a category that has traditionally fallen under state, not federal, jurisdiction.

Anderson Advisors partner Toby Mathis, Esq. has discussed the Fourth Amendment implications of requiring business owners to submit personal identification documents — including government-issued photo IDs — to a federal database. Mathis has noted that the collection of this level of personal data from millions of business owners, without individualized suspicion, raises questions that courts are still working through.

Tax attorney and CPA Mark J. Kohler has noted concerns about the compliance burden the CTA places on small businesses. Kohler has pointed out that while the law's stated purpose involves combating illicit finance, the reporting obligations fall primarily on legitimate small business owners — the same population least likely to be engaged in the activities the law targets.

The Preparedness Question

Despite the current suspension, several attorneys in this space have cautioned business owners against assuming the issue is permanently resolved. Attorney Garrett Sutton, Esq. of Corporate Direct and his colleague Ted Sutton, Esq. have covered the CTA extensively in their educational content, noting that the law remains on the books and could be reinstated — potentially with compressed compliance timelines — if courts reverse course or Congress amends the statute.

As Clint Coons has emphasized in his coverage of the CTA, business owners may want to keep their beneficial ownership information organized and accessible, even during the enforcement pause. If the legal landscape shifts again, having documentation ready could help avoid a last-minute scramble.

Related Development: FinCEN Real Estate Ownership Reporting

In a related development, FinCEN has also pursued rulemaking around real estate ownership reporting. This initiative, which Anderson Advisors has covered extensively, would require certain information about the beneficial owners of legal entities involved in non-financed residential real estate transactions to be reported.

The proposed rules are designed to address concerns about the use of shell companies and LLCs to purchase real estate anonymously — a practice that federal agencies have argued may facilitate money laundering. FinCEN has used Geographic Targeting Orders (GTOs) in select metropolitan areas to require title insurance companies to identify beneficial owners in certain all-cash real estate transactions, and the proposed rules would expand this approach nationally.

For business owners who use LLCs for real estate holdings, this represents a separate — though thematically related — reporting framework. The real estate reporting rules have their own rulemaking timeline and may proceed independently from the CTA's beneficial ownership reporting requirements for business entities.

As with the CTA itself, the real estate reporting rules are still in the rulemaking process, and their final form and implementation timeline remain uncertain. Business owners who hold real estate through LLCs may want to monitor these developments alongside the CTA litigation.

Wyoming Privacy and Federal Transparency: The Tension

For business owners who chose Wyoming specifically for its privacy features, the CTA and related federal initiatives represent a tension between state-level privacy and federal transparency goals.

Wyoming has long been recognized for its strong privacy protections for LLC owners. The state does not require members or managers to be listed on Articles of Organization. There is no state-level public registry of LLC owners. Wyoming imposes no state income tax, which means no ownership disclosure through state tax filings. These protections remain fully in place regardless of what happens with the CTA at the federal level.

Wyoming's State-Level Protections Are Unchanged

Nothing about the CTA — whether enforced or suspended — alters Wyoming's state-level privacy framework:

• No public ownership disclosure. Wyoming does not require members or managers to appear on any publicly filed document.
• Organizer services. Wyoming allows the use of a registered agent or organizer on formation documents, which is designed to keep the owner's name off public records.
• No state income tax. No state tax return means no state-level ownership disclosure through tax filings.
• Charging order protections. Wyoming's asset protection statutes, including its charging order provisions, are unrelated to federal reporting requirements and remain in effect.

BOI Data Was Never Designed to Be Public

It is worth noting that even if the CTA were fully enforced, BOI data would not become public record. FinCEN's beneficial ownership database was designed as a secure, non-public federal system. Access would be limited to federal law enforcement, state and local law enforcement with a court order, financial institutions with the company's consent, and federal regulators.

FinCEN will store BOI in a secure, non-public database with strict access controls. The information will not be publicly available and will only be disclosed to authorized recipients as outlined in the CTA. — FinCEN, Beneficial Ownership Information Reporting Final Rule, 31 CFR Part 1010

The general public would not be able to search, access, or request BOI data. There would be no FOIA access to the database, and unauthorized disclosure by a government official would carry criminal penalties. In a scenario where the CTA is eventually enforced, a Wyoming LLC owner would be disclosing information to a restricted federal database — not to any public record.

What To Do Now: Guidance for LLC Owners

Given the current state of the law, here are steps that may be worth considering:

1. Enforcement is currently suspended for domestic companies. There is no active filing requirement and no deadline for domestic LLCs. If someone contacts you claiming you must file a BOI report immediately and pay a fee, that is not consistent with current FinCEN guidance.
2. Keep your beneficial ownership information organized. Even though filing is not currently required, having each beneficial owner's name, date of birth, address, and identifying document readily accessible may save time if the legal landscape changes.
3. Watch for legislative and judicial developments. The CTA remains on the books. Appeals are still active. Congress could amend the law. A change in enforcement posture could come with compressed compliance timelines.
4. Consult your attorney for guidance specific to your situation. Every business structure is different, and the intersection of federal reporting requirements with state privacy protections may raise questions that are best addressed by a licensed attorney who understands your particular circumstances.
5. Maintain your Wyoming LLC's annual compliance. Your annual report and registered agent service remain required under Wyoming state law. Federal CTA issues do not change your state-level obligations.

This Story Is Still Developing

The Corporate Transparency Act and its BOI reporting requirements represent one of the most significant regulatory developments affecting small business privacy in recent history. The law is still on the books. The court challenges are still active. Congress may act. And the Treasury Department's rulemaking process for both business entity reporting and real estate ownership reporting continues.

We will continue to update this article as the situation develops. If you are a Wyoming LLC Service client, we monitor these developments and will reach out directly if action is needed on your part.