A federal district court in Alabama, in the case of National Small Business United v. Yellen, ruled the Corporate Transparency Act (CTA), which mandates businesses to report beneficial ownership information as unconstitutional, siding with the National Small Business Association and other plaintiffs. The court found the act exceeded Congress's authority, arguing it lacked constitutional backing for its broad requirement on businesses to disclose detailed ownership information. Despite recognizing the act's aim to deter financial crimes, the court highlighted its failure to align with constitutional precedents, emphasizing the legislative overreach beyond enumerated powers.

The CTA sought to combat money laundering by requiring over 32 million entities to provide comprehensive details about their owners and, for new entities, their applicants, with strict penalties for noncompliance. However, the court criticized the act for not fitting within Congress's commerce or taxing powers and suggested the possibility of constitutionally acceptable legislation, referencing past laws as examples.

The ruling dismissed the government's defense based on various constitutional powers, focusing on the act's broad scope and its intrusion into areas traditionally governed by state laws.  As of this point, it is unclear whether the Treasury Department's Financial Crimes Enforcement Network (FinCEN) will appeal the decision.  Therefore, until FinCEN issues an official press release or statement, all businesses should continually comply with the BOI filing requirements.  We will provide updates regarding any further developments as they arise.