Federal Appellate Court Upholds the CTA
On December 16, 2025, the United States Court of Appeals for the Eleventh Circuit issued a unanimous decision in National Small Business United v. U.S. Department of the Treasury, holding that the CTA is constitutional. This ruling overturned a March 2024 federal district court decision that had invalidated the statute.
The Eleventh Circuit concluded that Congress had the authority to enact the CTA as part of its broader effort to address money laundering, shell company abuse, and other financial crimes. As a result, the CTA is once again confirmed as valid federal law.
Enforcement Reality: Treasury’s Interim Rule
Despite the appellate court’s ruling, Illinois businesses are not currently facing enforcement risk for failing to file beneficial ownership information (“BOI”) reports.
On March 21, 2025, the U.S. Department of the Treasury issued an interim rule directing the Financial Crimes Enforcement Network (“FinCEN”) not to pursue enforcement actions against U.S. citizens or domestic reporting companies, including those formed or registered in Illinois. Treasury indicated that its immediate enforcement efforts would be focused on foreign reporting companies.
This approach reflects the government’s recognition that:
- Additional litigation remains pending,
- Courts in different jurisdictions have reached varying conclusions, and
- Further regulatory guidance may be necessary before full domestic enforcement resumes.
What This Means for Illinois Entities
For Illinois corporations, limited liability companies, limited partnerships, and similar entities registered with the Illinois Secretary of State, the current practical effect is as follows:
- The CTA remains in force as a matter of federal law.
- Domestic Illinois entities are not presently subject to BOI enforcement under Treasury’s interim rule.
- Reporting obligations for domestic companies could be reinstated with little notice through future regulatory or judicial action.
Why Illinois Businesses Should Still Prepare
Although enforcement is paused, Illinois businesses should not treat the CTA as irrelevant. Instead, this period should be used to prepare for potential reactivation of reporting requirements.
Businesses should consider:
- Identifying individuals who qualify as beneficial owners under the CTA, and
- Collecting the required information, including:
- Full legal name
- Date of birth
- Current address
- Government-issued identification number
Entities that previously submitted BOI reports should continue to monitor ownership and control changes so they are positioned to comply with any future update requirements, which may again require filings within 30 days of a reportable change.
CTA Background for Illinois Businesses
Effective January 1, 2024, the CTA became federal law and applies broadly to entities formed or registered through a Secretary of State, including the Illinois Secretary of State. The Act requires reporting companies to submit beneficial ownership information to FinCEN, a bureau of the U.S. Department of the Treasury responsible for collecting and analyzing financial data to combat illicit financial activity.
Bottom Line
The Eleventh Circuit’s decision confirms that the CTA is constitutionally sound, but Treasury’s interim rule means Illinois businesses are not currently subject to enforcement. That exemption may not be permanent. Illinois companies should use this window to understand their potential obligations and prepare for compliance if domestic reporting requirements are reinstated.
Questions About How the CTA Affects Your Illinois Business?
For guidance on how the Corporate Transparency Act may impact your Illinois company, or to discuss compliance planning, contact George Bellas for more information.