Please review the following information from our corporate member, Mandelbaum Barrett PC:
As a result of the Federal Court in Eastern District of Texas issuing a nationwide injunction against enforcement of the Corporate Transparency Act, at this time there is no requirement to comply with the Act. However, if the injunction is lifted on appeal, it is an open question whether or not the failure to comply during the injunction period is actionable; or whether filers will be given additional time to file. You may have to respond on an expedited basis to meet reporting deadlines. If the injunction is made permanent, there would be no obligation to comply unless the injunction is lifted by an appeal court or otherwise resolved by Congressional Act or Executive Order.
The agency may issue rule guidance regarding filing in light of the decision, or it may not and leave everyone guessing as to what exposure non-filers will have if the injunction is lifted. Unfortunately, as this is unprecedented, there is little certainty.
To absolutely insure against liability, a business can complete the filing within the current deadline structure despite the injunction. The Court’s decision does not prohibit filing and the law remains in effect -- only enforcement is enjoined. On the other hand, the process is expensive and time consuming. If a business files and the injunction becomes permanent, or the act is repealed under the new administration, the expense and effort is wasted and significant confidential information unnecessarily disclosed. While there is no guarantee as to the result, it would be reasonable to expect that even if the injunction is lifted there would be a grace period for businesses to file.
You can learn more about Mandelbaum Barrett PC by clicking here or contact hospitality@mblawfirm.com.
Please note the New York City Hospitality Alliance provides this information to you from third-party product and service providers in conjunction with their corporate membership, and the information is provided to you for general informational purposes only, so it should not be relied upon for business, personal, medical, legal or financial decisions.
