NSBA v. Yellen and the Corporate Transparency Act

The Corporate Transparency Act (the “Act”) imposes substantial reporting and disclosure requirements on new and existing business entities throughout the country. Since its passage, the Act’s constitutionality has been challenged. One such challenge occurred in the federal district court of northern Alabama. On March 1, 2024—in a case known as NSBA v. Yellen—a federal judge ruled that the Act was unconstitutional because it exceeded the federal government’s authority. Despite this ruling, the U.S. Treasury Department, which enforces the Act through its Financial Crimes Enforcement Network (FinCEN), takes the position that the Act remains enforceable against everyone that is not a party to NSBA v. Yellen case. Based on this position, FinCEN will continue to enforce the Act against many small businesses throughout the United States.

We send this notice to you so that you are aware that the federal government will continue to enforce the Act despite the constitutionality determination in NSBA v. Yellen. We anticipate further legal challenges to curb enforceability of the Act, such as a lawsuit currently pending in the state of Ohio. As these challenges unfold, we will do our best to update our clients about the enforceability of the Act. In the meantime, please stay informed about state and federal regulation that may affect your business.

This notice is not intended to be specific legal advice. We urge you to consider reading the Act to acquaint yourself with the ongoing obligations under the Act as those obligations continue to be refined by the Federal Government. Information about the act can be found at https://fincen.gov/boi. If you wish to speak with an attorney related to these obligations, including the impact of NSBA v. Yellen, please contact our office to schedule an appointment with one of our attorneys.