A nationwide order has been issued that prohibits the enforcement of the CTA (Corporate Transparency Act) and the beneficial ownership information (BOI) reporting rule. A Texas federal district court “called the CTA ‘quasi-Orwellian,’ and found that the legislation ‘is likely unconstitutional as outside of Congress’s power.'”
Key to the ruling is the whether Congress can enact the CTA under the Commerce Clause, which was the government’s argument. However, the court disagreed, stating: “The CTA is a law enforcement tool — not an instrument calibrated to protect commerce; an exercise of police power, rather than a regulation of an activity which might impair commerce among the several states. This the Commerce Clause will not tolerate.” (Source – Journal of Accountancy, Martha Waggoner, December 5, 2024)
