“Orwellian” Law Compels 32 Million Small Organizations and Their Owners to Surrender Confidential Information—or Face Criminal Prosecution

Texas Top Cop Shop et al. v. Todd Blanche et al.

Texas Top Cop Shop is a family-run store with a single storefront that sells uniforms and equipment to police officers and other first responders. Mustardseed Livestock is a small family dairy in Lingle, Wyoming. The CTA orders businesses like these to report the names, home addresses, birth dates, and passport or driver’s license copies of their owners and controllers to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). That information is then made available to federal law enforcement and is searchable without a warrant. Failing to file brings civil and criminal penalties. In 2024, these businesses and other clients sued.

Why it’s Illegal:

The Constitution allows Congress to regulate commerce between the states. The act of creating a business under state law is not interstate commerce, which means Congress had no power to enact the CTA. The law also violates the First and Fourth Amendments.

What we’re asking the court to do:

We are asking the Fifth Circuit to uphold an earlier order by a Texas federal trial court judge blocking the CTA and to declare the law unconstitutional and permanently block it.

“Nearly everything we produce is consumed right here on our Wyoming farm. The idea that the federal government can demand our personal information because we might someday engage in interstate commerce is nonsense.” – CIR client and Mustardseed Livestock owner Tony Goulart

Why this case matters:

• A final court ruling would decide whether filing formation papers with a state is enough to put a business under federal surveillance. If it is, Congress’s commerce power has no meaningful limit.
• By the government’s own estimate, the law reaches the owners of more than 32 million existing businesses and 5 million new ones each year. Lobbyists won exemptions for 23 categories of entities, including banks and public companies, so the burden lands on the smallest businesses.
• The rules change with each administration. The Treasury Department exempted domestic companies by an interim rule in 2025 and a final rule in 2026, and almost half the states are already suing to reverse it. Only a constitutional ruling settles the question.
• CIR brought this case as part of its project to restore federalism and hold federal agencies to the powers the Constitution grants. Our lawyers have carried it from the trial court to the Supreme Court twice.

The Full Story

A Uniform Shop and a Family Dairy

Texas Top Cop Shop has four employees and makes no online sales. Texas has never required it to file reports like the CTA demands or pay for the legal review accurate reports require.

Tony Goulart’s dairy, Mustardseed Livestock, ships nothing outside Wyoming. Most of its milk is consumed on the farm, and the rest is sold directly to local customers. In 2023, its milk sales totaled less than $30,000.

Unconstitutional Three Times Over

First, the CTA exceeds Congress’s power. For more than two centuries, states have governed how corporations and limited-liability companies are created and run. Congress may regulate commerce between the states, but simply incorporating your organization is not commerce.

The law also reaches anyone with “substantial control” over a business, even someone who has no ownership stake. This means that a relative who helps an entrepreneurial family member with a start-up loan could be caught in a government dragnet.

Second, the CTA violates the First Amendment. In NAACP v. Alabama (1958), the Supreme Court held that forcing a group to reveal its members can chill association as surely as a ban. That danger is sharpest for political clients such as the Libertarian Party of Mississippi, which is another party to this suit. One of the CTA’s sponsors, Sen. Sheldon Whitehouse, said the law would help track “dark money” behind advocacy he opposed. But money isn’t “dark” just because it is used for political advocacy, and politicians have no right to intimidate those who might organize and speak against them.

Third, the CTA violates the Fourth Amendment. It collects private information for law enforcement without suspicion, a warrant, or a judge’s review.

A Nationwide Block, Then a Shifting Rulebook

Less than a month before reports were due on January 1, 2025, U.S. District Judge Amos Mazzant issued a nationwide preliminary injunction. Treasury confirmed the deadline was suspended, so accountants and lawyers nationwide told clients they didn’t need to file.

After losing in the Fifth Circuit, the Biden administration asked the Supreme Court to lift the injunction on December 31, 2024, primarily because of its reach. On January 23, 2025, the Court temporarily granted that request without issuing a ruling on the law’s constitutionality.

The incoming Trump administration then issued an interim rule exempting domestic companies from the CTA’s reporting requirements. The Fifth Circuit paused the appeal to wait for Treasury’s final action.

On May 6, 2026, CIR asked the Supreme Court to take the case before the Fifth Circuit ruled, alongside National Small Business United v. Bessent, a similar challenge from another federal circuit that reached the opposite result. On August 14, 2026, FinCEN issued a final rule exempting domestic companies. It found collecting their information “would not provide law enforcement with highly valuable information” and “is not in the public interest.” On October 5, 2026, the Supreme Court declined to hear either case, and did not decide whether the CTA is constitutional.

Three weeks later, the Oregon and Illinois Attorneys General led a coalition of states in suing FinCEN in Oregon federal court. Their suit, State of Oregon v. Bessent, claims FinCEN skipped federally-required steps and acted arbitrarily when creating the final rule exempting domestic companies. The states want the exemption thrown out and the ownership database, which FinCEN has said it will delete, preserved.

That suit shows why our case against the CTA is not moot. An exemption granted by rule can be undone by a district court or by the next administration, and at least one CIR client still has a reporting obligation under the new rule. The statute still remains on the books. CIR is pressing the Fifth Circuit appellate court for a constitutional ruling.