Should Farmers File? The Ongoing Legal Fight Over the Corporate Transparency Act

It seemed like a good idea.

The Corporate Transparency Act (CTA) was meant to fight money laundering. No longer could crooks hide transactions using mysterious shell corporations with vague identities of their owners. By Jan. 1 of this year, all of the nation’s corporations and LLCs had to report their beneficial owners to a branch of the U.S. Treasury Department — the Financial Crimes Enforcement Network (FinCEN). 

The CTA had just one major political flaw: Its new dragnet is unpopular. Thousands of legitimate small businesses and farm owners faced fines of up to $606 per day in 2025 if they didn’t file beneficial ownership information with FinCEN by the deadline. 

This has led to several challenges to the law in courts around the country. Some recent decisions may be confusing (and we’ll try to sort them out). But here’s the bottom line:

• As of Jan. 31, you don’t have to file anything with FinCEN. This is the link to the FinCEN web page with that announcement. If you opt to do nothing, you or your attorney may want to check that link regularly to ensure that an injunction against enforcement isn’t lifted.
• You can still file with FinCEN if you prefer to not worry about this anymore. Some farmers with LLCs or corporations have already done that. (Farms organized as sole proprietorships or general partnerships never had to report anyway.)

CTA Court Cases

If you find the recent history of the CTA confusing, you’re not alone.

Judges in two separate cases in Texas have issued nationwide injunctions that stopped FinCEN from enforcing the CTA and requiring reports of beneficial ownership.

Then, on Jan. 23, the U.S. Supreme Court stayed the injunction in one of those cases: Texas Top Cop Shop, Inc., et al. v. Merrick Garland. Some reports made it seem as if the Treasury Department’s FinCEN could again enforce the law and ownership reporting.

But the Supreme Court’s temporary stay doesn’t apply to the second Texas case: Smith v. U.S. Department of the Treasury. So that nationwide ban on enforcement remains in place.

This may not change any time soon, says Kristine Tidgren, an attorney who heads Iowa State University’s Center for Agricultural Law and Taxation.

“It appears that the new administration is not in a hurry to ask the Supreme Court to lift the injunction for this other case,” Tidgren said, adding that she doesn’t know the exact plans of the Trump administration. Bills also have been introduced in the U.S. Senate and the House of Representatives to repeal the CTA, Tidgren said.

Meanwhile, arguments in the Texas Top Cop Shop case will be heard at the Fifth Circuit Court in late March.

At Texas A&M University, Tiffany Dowell Lashmet is an attorney and Extension specialist in agricultural law who has also been following the CTA.

“I agree with Kristine,” she said. “I just don’t think this is a priority for this administration, or for Congress, frankly.”

She cautions, though, that there isn’t a way to know how these court cases will ultimately be resolved.

“There’s no way to know how long the stay will remain in place,” Lashmet added. “It will just depend on the litigation, appeals, etc. It really could be lifted anytime or it could last for months.”

Reporting Before the Deadline

Is there a downside to reporting anyway? Both ag law experts say that’s a matter of personal preference. If you don’t believe the government should have more information about your farm’s legal entities, then you’ll hold off. 

“Some may disagree and believe there is no downside and they’d rather just have it done and not have to worry about what happens with the stay,” Lashmet said.

Operating in the heart of Texas lawsuits, farmer and County Commissioner Dee Vaughan of Dumas has opted to report.

“I definitely can see both sides of the argument for and against having to register,” he said. “I registered my entities prior to the court cases. I get it that people don’t like the government in their business nor do they like paperwork. But as a county commissioner, I see what certainly appears to be cartel money coming into Texas buying farmland and legitimate businesses to launder money.”

In his Texas Panhandle county, Vaughan has seen suspicious activity — “people with modest means now building multimillion dollar homes and buying farmland with no financing.” A few are even buying private jets.

His own farming business has four entities. He asked each of the owners in those businesses to text him an image of their driver’s licenses or passports. Then he uploaded that information on the FinCEN website. “It only took me about 30 minutes to do the first one and five minutes for the others,” he recalled.

Vaughan, who is a past president of the National Corn Growers Association, still does some lobbying in Washington for Texas-based ag groups. When in Washington recently, the future of the CTA wasn’t a hot topic. “That’s a question we never got from our congressional contacts,” he says. 

Still, like others, Vaughan would welcome more certainty about a law with a crime fighting purpose that some see as a burden. “We need to make a decision one way or the other,” he says. 

Stay Up to Date

As CTA works its way through the courts, stay up to date with these two university blogs from Iowa State University and Texas A&M.