CTA – Where Does It Stand Today?
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The Corporate Transparency Act (the “CTA” or the “Act”) has dropped off of most people’s radar, perhaps prematurely. Although December 2025 was not the CTA roller coaster that December 2024 was,[1] it still provided some year-end entertainment.
You may remember that the Financial Crimes Enforcement Network, an arm of the U.S. Department of the Treasury (“FinCEN”), issued the Interim Final Rule (the “Interim Rule”) on March 21, 2025,[2] essentially eliminating the CTA’s reporting requirements for U.S. entities and U.S. control persons. This removed the compliance concerns for probably 99% of our clients; only non-U.S. foreign entities qualified to do business in a state still have reporting requirements, and only with respect to their owners who are not “U.S. Persons” under the Act (as determined under the Interim Rule). FinCEN has estimated that the reporting requirements have gone from covering 36.5 million entities nationwide to affecting less than 20,000 companies.[3]
As Monty Python might say, however, the CTA isn’t dead yet. First, the statute remains in place, even if FinCEN’s Interim Rule has gutted its efficacy.[4] In fact, the (generally conservative) 11th Circuit has recently issued National Small Business United v. U.S. Department of the Treasury (“NSBU”),[5] reversing the District Court for the Northern District of Alabama decision[6] which had declared the CTA to be an invalid exercise of Congress’ authority. Notably, NSBU provides a strong defense of the constitutionality and intended purpose of the Act.
Second, although FinCEN indicated last spring that a Final Rule would be issued before the end of 2025, it all but admitted in a recent court filing that the Final Rule’s release is not imminent.[7] While my inside sources do not believe that FinCEN is planning to undo the Interim Rule, we all know it ain’t over ‘til it’s over. Perhaps the NSBU case will prompt a re-thinking of the Interim Rule’s approach. The ABA Business Law Section’s LLCs, Partnerships and Unincorporated Entities Committee can also be seen as advocating for the CTA’s original intent to be honored. Even if this Administration is not inclined to respect the legislative intent included in the Act and undo the Interim Rule, as long as the statute remains on the books,[8] a different Administration might take a different approach.[9]
A third factor is the New York LLC Transparency Act (the “NY LLCTA”), which took effect on January 1, 2026. In a nutshell, New York State passed its own version of the CTA in 2024, requiring initial beneficial ownership filings (and annual updates) but applying only to LLCs organized or qualified to do business in New York.[10] The original statute incorporated by reference the definitions and exemptions of the federal CTA, a strategy which no longer worked after the Interim Rule was issued. The New York legislature responded by passing SB 8432, allowing New York to decouple its act from the CTA and establish its own definitions more in line with the original CTA regulations. However, at literally the last minute, Governor Hochul vetoed the bill.[11] This means that the NY LLCTA took effect, but only with a scope that continues to parallel the current federal scheme (i.e., only applying to non-U.S. foreign entities qualified to business as LLCs in New York; whether a foreign entity meets the definition of an LLC is a separate question). The New York Department of State has recently opened a website to allow foreign companies covered by the NY LLCTA to comply with that act’s reporting requirements, here. Even exempt entities may need to file an Attestation of Exemption.
A few other states (including California, Maryland, and Massachusetts) took steps to adopt their own CTA-equivalents but never finished the process.[12] The District of Columbia comes closest to having ownership reporting requirements,[13] while New York City seems to require ownership information for LLC transferors and transferees on the New York City Real Property Transfer Tax Return.[14]
There are also the general residential real estate geographic targeting orders (generally applying to title companies and some “money service businesses”) and specific Residential Real Estate Rules (applying to persons who provide “real estate closing and settlement services”) adopted by FinCEN. These will require reporting of non-financed residential purchases if and when they take effect.[15]
There are a couple of us here who continue to follow the CTA saga for some reason.[16] We believe that FinCEN will issue a Final Rule at some point, and over a dozen cases challenging the CTA remain pending in various federal courts around the country. One or more of them may ultimately make their way to the Supreme Court. We will try to keep you abreast of any significant developments. In the meantime, please call with questions, especially if you work with a D.C. entity or a non-U.S. foreign entity qualified to do business in New York.[17]
[1] See Mark R. High, Jon D. Cohen & John T. Schuring, Fifth Circuit Reinstates CTA Injunction, FinCEN Still Accepting Voluntary Filings, Dickinson Wright PLLC: Indus. Alerts (Dec. 2024), https://www.dickinson-wright.com/news-alerts/highcohen-fifth-circuit-reinstates-cta-injunction, and Mark R. High & Jon D. Cohen, Supreme Court Stays Fifth Circuit CTA Injunction, But Clarity Remains Elusive, Dickinson Wright PLLC: Indus. Alerts (Dec. 2024), https://www.dickinson-wright.com/news-alerts/client-alert-supreme-court-stays-fifth-circuit-cta for a process summary.
[2] Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, 90 Fed. Reg. 13688 (Mar. 26, 2025). See Mark R. High & Jua Tawah, FinCEN Narrows CTA Reporting Requirements, Indus. Alerts (Mar. 2025), https://www.dickinson-wright.com/news-alerts/client-alert-fincen-narrows-cta-reporting-requirements.
[3] See Christina Houston, Robert R. Keatinge, Thomas E. Rutledge & James J. Wheaton, What Fresh Hell Can This Be? Beneficial Ownership Reporting and the CTA, American Bar Association: Bus. L. Today (Dec. 10, 2025), https://businesslawtoday.org/2025/12/what-fresh-hell-can-this-be-beneficial-ownership-reporting-cta/ (“BLT Article”), text at n. 31, 33. Note that the Interim Rule has some holes in it, as identified in the BLT Article. Applicants, for example (including me), may retain the obligation to update their registration information. Practically speaking, however, no one anticipates any enforcement actions to result from failing to do so, so I have not seen anyone advocate for Applicants to file these updates.
[4] While some might say that the Interim Rule “decimated” the CTA, the BLT Article, citing the Greek philosopher Plutarch, says this term dramatically understates the actual effect. BLT Article, n. 29.
[5] National Small Business United v. U.S. Department of Treasury, No. 24-10736 (11th Cir. Dec. 16, 2025); See Peter Hardy, Alan Winston Granwell & Siana Danch, Eleventh Circuit Upholds Constitutionality of Corporate Transparency Act, Holland & Knight Alert (Dec. 29, 2025), https://www.hklaw.com/en/insights/publications/2025/12/eleventh-circuit-upholds-constitutionality-of-corporate-transparency.
[6] National Small Business United v. Yellen, No. 5:2022cv01448 – Doc. 51 (N.D. Ala. Mar. 1, 2024).
[7] Status Report, Smith v. U.S. Dept. of Treasury, Case No. 6:24-cv-00336-JDK (E.D. Tex.), Doc. 53 (filed Dec. 3, 2025).
[8] Legislation to repeal the CTA was introduced in both houses of Congress early in 2025, but, to date, no action has apparently been taken on the bills.
[9] The Financial Action Task Force (“FATF”), a multi-national group consisting of about 40 countries, conducts peer reviews of each member country on an ongoing basis to assess levels of implementing FATF Recommendations. These reviews provide an in-depth analysis of each country’s system for preventing criminal abuse of the financial system. Several of the FATF Recommendations involve collecting beneficial ownership information. FATF has given the U.S. a negative rating on our methods (or lack thereof) of collecting beneficial ownership information for 20 years, which prompted the original adoption of the CTA. FATF is scheduled to re-evaluate the U.S. in 2026. I do not expect our rating will be upgraded in that process.
[10] The original version of the NY LLCTA would have made the beneficial ownership information available to the public. This caused quite a stir in the New York City landlord/tenant community, as tenants could have learned who actually owns their over-priced shoeboxes. (I have two daughters living together in Manhattan’s East Village and thus have personal experience with this situation.) That loophole was ultimately fixed by limiting access to beneficial owner information to law enforcement, as the CTA does. The veto of SB 8432, combined with the Interim Rule, however, renders the issue moot, as most landlords are no longer subject to the filing requirements.
[11] Proskauer Rose LLP, Transparency Required, Clarity Not Included: New York’s LLC Reporting Rules May Return (Or Not) (Dec. 23, 2025), https://www.proskauer.com/alert/transparency-required-clarity-not-included. For further context, see also Chris Bragg, Hochul May Veto Bill to Protect LLC Transparency Act from Trump, News From The States (Dec. 17, 2025) https://www.newsfromthestates.com/article/hochul-may-veto-bill-protect-llc-transparency-act-trump.
[12] Houston, Keatinge, Rutledge, and Wheaton, What Fresh Hell Can This Be? Beneficial Ownership Reporting and the New York LLC Transparency Act, American Bar Association: Bus. L. Today (Dec. 11, 2025), (“BLT Article 2”), https://businesslawtoday.org/2025/12/what-fresh-hell-can-this-be-beneficial-ownership-reporting-new-york-llc-transparency-act/, n. 5.
[13] See D.C. Code § 29-102.01(a)(6), (7) (addressing initial filings by, respectively, domestic and foreign entities); see also id. at § 29-102.11(a)(6), (7) (annual report filings by, respectively, domestic and foreign entities), all cited in BLT Article 2, n. 4.
[14] See Thomson Reuters: Practical L. Real Est., Revised NYC Property Transfer Tax Return Requires New Disclosures for Multiple Member LLCs (Jul. 23, 2015), https://content.next.westlaw.com/w-000-4796?isplcus=true&contextData=%28sc.Default%29&bhcp=1&transitionType=Default; see also Lauren Elkies Schram, 5 Reasons Why the New LLC Disclosure Rules Stink, Com. Observer (Jul. 29, 2015), https://commercialobserver.com/2015/07/5-reasons-why-the-new-llc-disclosure-rules-stink/. Both cited in BLT Article 2, n. 58.
[15] See Christina Houston, Robert R. Keatinge, Thomas E. Rutledge & James J. Wheaton, What Fresh Hell Can This Be? Beneficial Ownership Reporting in Limbo, American Bar Association: Bus. L. Today (Dec. 9, 2025), https://businesslawtoday.org/2025/12/what-fresh-hell-can-this-be-beneficial-ownership-reporting-in-limbo/ as a good place to start understanding the FinCEN real estate reporting requirements.
[16] We also enjoy watching videos of train wrecks and dumpster fires.
[17] I appreciate the assistance of Mark Ryerson (Equity Member, Chicago) and Logan Cholody (Associate, Detroit) in preparing this article. I also thank Alexis Lupo (Director, Corporations Division, Michigan Department of Licensing and Regulatory Affairs) and Justin Klimko (Shareholder, Butzel Long, Detroit) for their insightful comments.
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