Weekly Legislative Update
January 6, 2025

CTA Injunction Reinstated

The Corporate Transparency Act saga took a welcome turn at the end of 2024 after a Fifth Circuit Court panel reinstated the nationwide injunction against the statute.

As a result of the order, businesses are not required to comply with the Corporate Transparency Act’s reporting requirements until the panel is able to more fully consider the injunction and the underlying merits of the legal challenge.

?The key paragraphs from that ruling are below:

On December 3, 2024, the district court entered an order enjoining enforcement of the Corporate Transparency Act and its corresponding Reporting Rule. The Government requested a stay of the preliminary injunction, which the district court denied. The Government appealed, and on December 23, 2024, a motions panel of this court granted the government’s emergency motion for a stay pending appeal. The order also expedited the appeal to the next available oral argument panel.

The merits panel now has the appeal, which remains expedited, and a briefing schedule will issue forthwith. However, in order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.

The panel also announced that it would hear arguments on March 25 on whether to keep the injunction in place while the broader case is heard by the full court. So absent the federal government appealing the decision to the Supreme Court - and SCOTUS intervening in the case - the injunction will stay in place through the end of March 2025, at the earliest.

?In other words, the order means covered entities do not need to file their Beneficial Ownership Information reports prior to that proceeding.

Meanwhile, we are still waiting on the Eleventh Circuit ruling on the case from Alabama and expecting a decision soon from the Western District of Michigan where the judge has already signaled his sympathy for the plaintiffs.

And finally, the new administration takes office on January 20th and we are working to get an administrative delay implemented through the end of 2025. 

Key members of the Trump team have already weighed in against the CTA (here, here and here). We just need to turn those concerns into action.

The unpredictability we’re seeing in the courts is a central part of our argument for an administrative delay. The ruling is a welcome development that should give us the time necessary to get that done.

IRS Increases the Standard Mileage Rate for Business use in 2025; Key Rate Increases 3 cents to 70 Cents per Mile

The Internal Revenue Service announced that the optional standard mileage rate for automobiles driven for business will increase by 3 cents in 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.

Optional standard mileage rates are used to calculate the deductible costs of operating vehicles for business, charitable and medical purposes, as well as for active-duty members of the Armed Forces who are moving.

Beginning Jan. 1, 2025, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

• 70 cents per mile driven for business use, up 3 cents from 2024.
• 21 cents per mile driven for medical purposes, the same as in 2024.
• 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
• 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.

The rates apply to fully electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.

While the mileage rate for charitable use is set by statute, the mileage rate for business use is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes, meanwhile, is based on only the variable costs from the annual study.

Under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. And only taxpayers who are members of the military on active duty may claim a deduction for moving expenses incurred while relocating under orders to a permanent change of station.

Use of the standard mileage rates is optional. Taxpayers may instead choose to calculate the actual costs of using their vehicle.

Taxpayers using the standard mileage rate for a vehicle they own and use for business must choose to use the rate in the first year the automobile is available for business use. Then, in later years, they can choose to use the standard mileage rate or actual expenses.

For a leased vehicle, taxpayers using the standard mileage rate must employ that method for the entire lease period, including renewals.

Notice 2025-5 PDF contains the optional 2025 standard mileage rates, as well as the maximum automobile cost used to calculate mileage reimbursement allowances under a fixed-and variable rate (FAVR) plan.

The notice also provides the maximum fair market value of employer-provided automobiles first made available to employees for personal use in 2025 for which employers may calculate mileage allowances using a cents-per-mile valuation rule or the fleet-average-valuation rule.