No More Anonymous Companies Part 3.
On March 1, 2024, the U.S. District Court for the Northern District of Alabama Northeastern Division ruled that the CTA is unconstitutional in National Small Business United, b/d/a the National Small Business Association, et al., v. Yellen, Case So. 5:22-cv-1448-LCB.
The ruling is only binding on the specific plaintiffs in the case, which are a small business owner named Isaac Winkles, and the National Small Business Association.
On March 4, 2024, the Financial Crimes Enforcement Network (“FinCEN”) issued a press release stating that FinCEN will comply with the ruling in that it will not currently enforce the CTA against the Yellen plaintiffs, which include members of the National Small Business Association that were members as of March 1, 2024.
FinCEN’s notice is available here: https://www.fincen.gov/news/news-releases/notice-regarding-national-small-business-united-v-yellen-no-522-cv-01448-nd-ala
The Department of the Treasury is expected to appeal the ruling, but in the meantime, we may see similar suits crop up in other federal district courts.
Given the uncertainty surrounding challenges to the CTA, we recommend that businesses continue to comply with the CTA until given clear guidance from FinCEN or a court that they are not required to do so.
