Enforcement of Corporate Transparency Act Halted
The beneficial ownership interest (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”) took another turn on March 2, 2025 as the United States Department of Treasury announced that it does not intend to enforce any penalties or fines associated with the BOI reporting rule under the CTA.
To provide context, prior to February 27, 2025, as a result of a Court ruling, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) had extended the BOI reporting deadline under the CTA until March 21, 2025. However, on February 27, 2025, FinCEN announced that “No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.” FinCEN then announced that it would have new reporting deadlines with additional clarifications by March 21, 2025. Learn more at: https://fincen.gov/news/news-releases/fincen-not-issuing-fines-or-penalties-connection-beneficial-ownership.
Three days later, on March 2, 2025, the Department of Treasury issued a press release stating that, “not only will it not enforce any penalties or fines associated with the [BOI] reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.” The Department of Treasury further promised new rulemaking that “will narrow the scope of the rule to foreign reporting companies only.” Learn more at: https://home.treasury.gov/news/press-releases/sb0038
HOW WE READ THIS: It appears the CTA will remain law with new deadlines forthcoming but, at this point, if you decide not to report BOI information to FinCEN, there will be no repercussions to you or your business. The Department of Treasury’s promise of further rulemaking narrowing the scope of the BOI reporting requirements to foreign reporting companies only, may eliminate the reporting requirement for most, if not all, U.S. companies.
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