Notable Developments

  1. S-Corp files amicus with SCOTUS
  2. Main Street backs repeal bill
  3. Second injunction issued

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SCOTUS Review Should Compel Administrative Relief

Last week the S Corporation Association filed an amicus brief with the Supreme Court urging retention of the nationwide injunction against the CTA. The brief was one of more than a dozen filed by the state attorneys general, trade associations, and other stakeholders, all of which can be accessed here.

With millions of affected businesses watching, now would be a perfect time for the incoming Trump administration to announce it will administratively delay filing under the CTA, thus providing these law-abiding businesses with some much-needed certainty.

We know we have important allies in the incoming Administration, including:

The Trump Administration has pledged to take action to protect American businesses starting Day One. A one-year delay in CTA filing needs to be the centerpiece of that effort.

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Main Street Backs Repeal Bill

Yesterday Representative Warren Davidson (R-OH) and Senator Tommy Tuberville (R-AL) reintroduced their bicameral CTA repeal bill, dubbed the Repealing Big Brother Overreach Act. In a sign of growing concern over the CTA, the House bill was introduced with sixty-eight original cosponsors.

S-Corp joined dozens of its trade association allies in a letter backing the legislation. The letter was spearheaded by our friends at NFIB and reads in part:

Small businesses are not criminals and do not wish to be treated as such by the federal government. We are not opposed to efforts to fight criminal activity, but these efforts must be targeted and tailored. The CTA is not. It is a sledgehammer that imposes exorbitant fines that could close down millions of small businesses forever and penalties that may criminalize tens of millions of law-abiding small business owners.

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Second Filing Delay Issued

While the Fifth Circuit Court of Appeals drama was unfolding, another Texas District Court judge ruled against the CTA in the case of Samantha Smith and Robert Means v Treasury. The good news for Main Street is the court stayed the CTA’s filing deadline while the case proceeds. So we now have two rulings delaying the filing deadline for everyone, pending further review.

As a reminder, there are (by our count) eleven cases in various courts across the country challenging the validity of the CTA. Here are the links:

  • Alabama (appealed): NSBA et al v. Yellen (11/15/2022)
  • Ohio: Robert J. Gargasz Co., L.P.A. et al v. Yellen (12/29/2023)
  • Michigan: Small Business Association of Michigan et al v. Yellen (3/1/2024)
  • Maine: William Boyle v. Yellen (3/15/2024)
  • Texas: NFIB et al v Yellen (5/28/2024)
  • Massachusetts: BECMA et al v Yellen (5/29/2024)
  • Oregon: Firestone v Yellen (6/27/2024)
  • Utah: Taylor v Yellen (7/29/2024)
  • Virginia: Community Associations Institute v. Janet Yellen (9/10/2024)
  • Texas: Samantha Smith and Robert Means v. Treasury (9/12/2024)
  • Texas: Association of American Physicians & Surgeons et al v Yellen (10/28/2024)

And for those looking for a full recap on where things stand, be sure to check out this helpful post from two attorneys at the firm Farella Braun + Martel LLP.