Alabama court rules the Corporate Transparency Act unconstitutional, but only for the plaintiffs
On 1 March 2024 a federal court in Alabama held that the Corporate Transparency Act exceeds Congress's constitutional powers, in National Small Business United v. Yellen. FinCEN said it would not enforce the Act against the named plaintiffs and NSBA members as of that date. Every other reporting company still had to file. The government appealed on 11 March.
The US District Court for the Northern District of Alabama entered a final declaratory judgment on 1 March 2024 in National Small Business United v. Yellen. It held that the Corporate Transparency Act (CTA) exceeds the limits of Congress's powers under the Constitution, and barred Treasury and FinCEN from enforcing it against the plaintiffs.
Who was covered
FinCEN's notice of 4 March 2024 said it would not enforce the CTA, for now, against:
- Isaac Winkles and the reporting companies for which he is a beneficial owner or company applicant
- the National Small Business Association (NSBA)
- members of the NSBA as of 1 March 2024
What it meant for everyone else
Nothing changed. All other reporting companies still had to file beneficial ownership reports by their deadlines. The Justice Department appealed on behalf of Treasury on 11 March 2024.
Later developments
Other challenges led to a nationwide injunction in December 2024 and a run of appeals into 2025. In March 2025 FinCEN exempted US companies and US persons, and an August 2026 final rule made that permanent. See our coverage of the CTA reporting regime.