Corporate Transparency Act Challengers Ask Court to Reopen Case

A seven-month pause on a constitutional challenge to the Corporate Transparency Act is no longer warranted, so the case should proceed, two Texas business owners told a federal court.

The stay on Samantha Smith and Robert Means’ CTA case—entered to allow the Treasury Department to issue new regulations—has outlasted the government’s own projections that the process would take six months, they said in a motion filed Monday in the US District Court for the Eastern District of Texas.

The stay no longer serves a valid purpose because it fails to clear the three factors that determine the legality of a stay pending rulemaking, Smith and Means said. Those factors include hardship to the government absent a stay, allowing the rulemaking would remove the need for judicial review, and that the stay is of limited or moderate duration.

“To the extent those factors were ever present, they can no longer be defended,” the motion said.

The CTA initially required most US businesses to report beneficial ownership information to Financial Crimes Enforcement Network, sparking this and several other lawsuits alleging unconstitutional federal overreach into state-regulated commerce

The Trump administration gutted regulations implementing the act last year to focus the reporting requirements on foreign-held rather than domestic entities. But Smith and Means pressed their case, arguing the law was unconstitutional as written, regardless of how it was implemented and enforced.

FinCEN launched a notice-and-comment period for new CTA regulations in March 2025 and said it expected to finalize the rules later that year.

“The department should not be permitted to box plaintiffs out of court indefinitely simply because filing a response brief would be inconvenient,” Smith and Means said.

The Texas Public Policy Foundation represents the plaintiffs.

The case is Smith v. Dep’t of the Treasury, E.D. Tex., No. 6:24-cv-00336, 1/26/26.