The Corporate Transparency Act – March 2025 Update
March 12, 2025
Reading time: 2 minutes
On March 2, 2025, the United States Treasury Department announced that it will not enforce the Corporate Transparency Act (CTA) against U.S. citizens and domestic reporting companies. More specifically, the Financial Crimes Enforcement Network (FinCen) will not impose any penalties or fines related to the Beneficial Ownership Information (BOI) reporting rule under any existing deadline nor will it enforce any penalties or fines against U.S. citizens or domestic reporting companies and their beneficial owners after the new rule takes effect. The Treasury Department further advised that it will be issuing a proposed rulemaking that will narrow the application of the rule to foreign reporting companies only.
This represents a change from a February 19, 2025, FinCen notice establishing a new BOI filing deadline of March 21, 2025. FinCen then announced on February 27, 2025, that it would propose an interim final rule on March 21, 2025, further extending the reporting deadline. This interim final rule is the above-referenced rule which is expected to apply to foreign reporting companies only.
What does this mean for practitioners representing domestic companies or foreign companies registered to do business in the United States? The Treasury Department’s statement suggests it intends to amend the rules to eliminate the reporting obligations of domestic companies with beneficial owners that are U.S. citizens. Further, FinCen will not enforce any penalties or fines against these companies or its beneficial owners. For foreign companies registered to do business in the United States, the Corporate Transparency Act and its BOI reporting obligations remain. However, FinCen will not enforce any penalties or fines against the company or its foreign beneficial owners until the new rule is in effect. (Foreign companies doing business in the United States but are unregistered are not currently subject to the reporting requirements.)
In summary, the Treasury Department issued a press release stating the following:
- There will be no enforcement of any penalties or fines associated with BOI reporting under the existing regulatory deadlines.
- There will be no enforcement of any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.
- The Treasury Department will issue proposed rulemaking to narrow the scope of the BOI reporting rule so that only certain foreign companies registered to do business in the U.S. would be required to submit BOI information.
AttPro will continue to monitor developments concerning the Corporate Transparency Act. At this time, the March 21, 2025 filing deadline is moot as FinCen will not enforce penalties or fines for failure to file BOI reports by this date.
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The purpose of the CTA is to collect more ownership information for U.S. businesses as a means of combatting tax fraud, money laundering, and financing for terrorism. Enacted in 2021 but going into effect January 1, 2024, certain businesses must now submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), providing details about those individuals associated with the company.
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