NFIB v. Yellen was the first federal court ruling to strike down the Corporate Transparency Act, holding it unconstitutional as beyond Congress's enumerated powers. This Anonymousllc.co reference covers the March 1, 2024 holding, the limited injunction, the Eleventh Circuit appeal, how it combined with Texas Top Cop Shop v. Garland to drive the March 2025 FinCEN exemption, and what it means for your LLC - with primary-source citations to the court documents throughout.
March 1, 2024 ruling by Judge Liles Burke. Held the Corporate Transparency Act facially unconstitutional as exceeding Congress's enumerated powers.
Open full text →On March 1, 2024, Judge Liles Burke of the Northern District of Alabama held the Corporate Transparency Act (31 USC § 5336) facially unconstitutional as exceeding Congress's enumerated powers. The ruling enjoined enforcement against the named plaintiffs - NSBA members - but did not extend nationwide. The court rejected all three constitutional bases the government offered: the Commerce Clause, the Necessary and Proper Clause, and the taxing power. It concluded no enumerated power authorized Congress to require companies to report their beneficial owners to FinCEN. The case, docketed as 5:22-cv-1448 and captioned National Small Business United v. Yellen, was the first federal court decision to strike the CTA down. It set the litigation trajectory that led to the March 2025 FinCEN exemption for domestic reporting companies.
The National Small Business Association (NSBA) and an individual member sued the Treasury Department and FinCEN in November 2022, challenging the Corporate Transparency Act on several constitutional grounds. The court reached the enumerated-powers question first and stopped there. The complaint raised enumerated-powers limits, First Amendment associational rights, Fourth Amendment privacy, and Fifth Amendment due-process and self-incrimination arguments. The plaintiffs contended that requiring millions of small entities to disclose their owners to a federal database exceeded federal authority and burdened constitutional rights. Because the court found the enumerated-powers defect dispositive, it did not need to rule on the First, Fourth, or Fifth Amendment claims. That narrow path is why the appeal focused on whether Congress had power to enact the CTA at all.
The court found the CTA fit none of the three powers the government invoked - the Commerce Clause, the Necessary and Proper Clause, and the taxing power. Each theory failed for a distinct reason the court spelled out. The CTA is not Commerce Clause regulation because forming a company is not itself interstate commerce; it is not Necessary and Proper because no enumerated power was being carried into effect; and it is not a tax because it imposes a reporting mandate, not a revenue measure. On the Commerce Clause, the court reasoned that incorporation is an act of state law, not interstate commercial activity, so the federal government cannot regulate it on that basis. The mere potential that a company later engages in commerce does not convert formation into commerce. On the taxing power, the court held the CTA imposes a reporting mandate backed by penalties, not a tax that raises revenue, so the taxing power cannot sustain it. With all three theories rejected, the CTA was unconstitutional on its face as to the plaintiffs.
The injunction was narrow: it protected only the NSBA, its individual member plaintiff, and NSBA members as of March 1, 2024. It did not extend nationwide, so non-member small businesses still had to comply pending appeal or a broader ruling. This plaintiff-only scope is why the decision, though significant, did not end BOI reporting for most companies. A business that was not an NSBA member on the ruling date gained no protection from it directly. The limited scope set up the next act. Because millions of non-member companies remained on the hook, litigation continued elsewhere - most consequentially in Texas Top Cop Shop v. Garland, which issued the nationwide injunction NFIB v. Yellen did not.
Treasury and FinCEN appealed to the Eleventh Circuit, which heard oral argument on September 27, 2024. The appeal became less consequential once FinCEN issued the March 2025 interim final rule administratively exempting domestic reporting companies. The appeal squarely presented whether Congress had constitutional authority to enact the CTA - the same enumerated-powers question the district court answered no. A circuit ruling would have bound every district within the Eleventh Circuit. The March 2025 rule overtook the litigation for the affected class. By exempting all domestic reporting companies through regulation, FinCEN mooted much of the practical dispute: the entities the case protected no longer had a filing obligation to contest.
Texas Top Cop Shop v. Garland was a separate case in the Eastern District of Texas that issued a nationwide preliminary injunction against the Corporate Transparency Act on December 3, 2024 - the broad, national block that NFIB v. Yellen's plaintiff-only injunction lacked. Unlike the Alabama ruling, the Texas injunction reached every reporting company in the country, halting BOI enforcement nationwide while the case proceeded. The litigation then moved through the Fifth Circuit and a Supreme Court stay order in McHenry v. Texas Top Cop Shop. Together, the two cases created sustained legal uncertainty around the CTA. Their combined pressure drove Treasury to issue the March 2025 interim final rule exempting domestic reporting companies rather than continue defending nationwide enforcement.
NFIB v. Yellen opened the sequence that ended domestic BOI reporting: it was the first ruling to strike the CTA down, Texas Top Cop Shop v. Garland then added a nationwide injunction, and the combined pressure drove FinCEN's March 2025 interim final rule exempting domestic reporting companies. The rule (90 FR 13688) rewrote the definition of "reporting company" so that US LLCs and corporations no longer file BOI, leaving only foreign reporting companies in scope. About 32 million US small businesses were removed from the requirement. So the practical effect of NFIB v. Yellen reaches every US LLC today, not through its narrow injunction but through the regulatory cascade it started. Anonymousllc.co maintains a BOI status tracker to flag any reversal.
Your US LLC is exempt from BOI reporting today because of the March 2025 FinCEN interim final rule, which NFIB v. Yellen and Texas Top Cop Shop v. Garland set in motion. The court rulings were the catalyst; the rule is the operative law. A Wyoming, New Mexico, Delaware, or Nevada LLC is a domestic reporting company and files nothing. A foreign reporting company - an entity formed under non-US law and registered in a US state - remains obligated and files at $150 per report. Anonymousllc.co confirms each client's BOI status at intake and monitors the rule through a status tracker. Because an interim final rule can be revised, that tracker ensures an exempt owner learns of any change before a deadline can arise.
Government, regulator, and primary-source documents underpinning this page.
5-minute WhatsApp intake. 5-10 day turnaround.