For much of the past year, the Corporate Transparency Act (CTA) largely faded from public view. After early headlines and litigation, many business owners understandably assumed CTA reporting obligations for domestic entities had been paused or narrowed.

On Dec. 16, 2025, however, the U.S. Court of Appeals for the Eleventh Circuit quietly shifted the legal landscape.

Despite its significance, the decision received relatively little attention outside legal and regulatory circles, particularly given its timing around the holidays.

For businesses that rely on LLCs, layered ownership structures, or real estate holding entities, it is worth understanding what actually changed, and what did not.

The CTA was the product of nearly a decade of bipartisan congressional negotiation and was enacted as part of the Anti-Money Laundering Act of 2020 and implemented in 2024.

Its original scope was extremely broad, potentially requiring beneficial ownership reporting from more than 30 million U.S. entities.

The law formally took effect in January 2024, and for a time it dominated compliance conversations nationwide, as it was anticipated that millions of entities would not comply – mostly due to a lack of awareness of the new law. Noncompliance carried both civil and criminal penalties, thus catching the attention of law firms and CPA firms around the country.

In March 2024, a federal district court in Alabama ruled the CTA unconstitutional, and FinCEN (the Financial Crimes Enforcement Network, a division of the Treasury Department) stated it was not enforcing the CTA against the plaintiffs (including the National Small Business Association and its members as of March 1, 2024).

While that ruling was limited to the plaintiffs before the court, it significantly disrupted momentum around the statute.

In March 2025, FinCEN issued an interim final rule exempting U.S.-created entities (and U.S. persons) from BOI reporting, while keeping reporting for certain foreign entities registered to do business in the U.S. (with new deadlines).

As a result, many businesses stopped paying attention.

The appellate court reversed the Alabama decision and held that the CTA is constitutional. In plain terms, the statute itself survived a major legal challenge and remains valid federal law.

Importantly, the 11th Circuit did not expand reporting obligations, set new deadlines, or override the Treasury Department’s interim final rule.

Current reporting requirements therefore remain limited. That said, the ruling materially strengthens the CTA’s legal foundation and removes a key obstacle that had cast doubt on its future enforceability.

At present, most domestic U.S. entities are not required to file beneficial-ownership reports under the interim rule.

But the December appellate decision makes clear that this limited enforcement posture is a policy choice, rather than a constitutional necessity.

Future regulatory action, congressional refinement, or additional litigation could expand reporting again. If that occurs, legal footing for doing so is now much firmer than it was a year ago.

This is one of those moments where nothing feels urgent, but the direction of travel becomes clearer.

For now, this update is simply about awareness. If you use entity structures as part of your business or investment strategy, it is worth knowing that the CTA is no longer on shaky constitutional ground, even if its practical impact is temporarily limited.

Benjamin L. Gottlieb is the founding partner of Gottlieb Law. Information: gottlieblawaz.com.