Court Ruling Again Halts Corporate Transparency Act, Offering Temporary Relief for Cattle Producers

December 29, 2024

In a surprising turn of events, the U.S. Fifth Circuit Court of Appeals has temporarily blocked the enforcement of the Corporate Transparency Act (CTA), granting cattle producers and other small businesses a much-needed reprieve. Just days after the initial injunction was lifted. The law, initially passed in 2021, was designed to curb financial crimes by increasing transparency in business ownership. However, its rollout has been mired in confusion, leaving rural America scrambling for clarity.

The CTA was temporarily halted on December 3, 2024, by the U.S. District Court for the Eastern District of Texas. However, on December 23, the U.S. Court of Appeals for the Fifth Circuit reversed that injunction, reinstating the compliance deadline of January 13, 2025. Just days later, on December 26, the Fifth Circuit reversed itself again, blocking the law and pausing enforcement. The Financial Crimes Enforcement Network (FinCEN) responded by suspending mandatory compliance, though voluntary reporting remains an option.

Kent Bacus, Executive Director of Government Affairs for the National Cattlemen’s Beef Association (NCBA), emphasized the ongoing uncertainty surrounding the act. “This rollercoaster of court rulings has caused widespread frustration and anxiety among farmers and ranchers,” Bacus said.

Watch the entire Podcast with Kent Bacus below: 

“This seesaw of decisions is exhausting,” Bacus remarked. “One minute, producers are preparing to comply, and the next, they’re back in limbo.”

The CTA mandates that businesses, including LLCs and partnerships, report detailed information about their beneficial owners to the U.S. Treasury. Failure to comply carries severe penalties, including fines of nearly $591 per day and potential prison time.

While the law targets money laundering by foreign entities, including the Chinese Communist Party and Russian oligarchs, Bacus argues its broad application unfairly burdens small businesses. “This law casts too wide a net, pulling in 32 million American businesses, most of which have done nothing wrong,” he said.

The NCBA has been actively lobbying for reforms to the CTA. Over the holidays, they sent a letter to Treasury Secretary Janet Yellen urging a delay in enforcement. The association also continues to advocate for permanent legislative fixes.

“We need Congress to step in and create a law that targets bad actors without criminalizing honest small businesses,” Bacus urged. “We’ve told Treasury to delay implementation until proper guidance is issued.”

While the current injunction offers temporary relief, the legal battle is far from over. Oral arguments in the Fifth Circuit are scheduled for March 25, 2025, and the Department of Justice is expected to appeal to the Supreme Court.

“This fight isn’t over,” Bacus warned. “Producers need to stay informed and prepared. We encourage everyone to consult with attorneys and tax professionals to avoid costly missteps.”

As 2024 draws to a close, small business owners and cattle producers remain in a state of uncertainty. Bacus stressed the importance of ongoing engagement with lawmakers. “We need to keep the pressure on Congress to fix this broken system. Rural America deserves clarity and fairness.”

Stay tuned to Western Ag Network and the Lancaster Ag Podcast for updates on this evolving issue. In the meantime, producers are urged to keep informed, stay in touch with their legal advisors, and make their voices heard in Washington.

Source: LaneCast Ag Podcast, Western Ag Network