The U.S. Department of the Treasury (the “Treasury Department”) and the Financial Crimes Enforcement Network (“FinCEN”) have recently made significant announcements that impact the enforcement and scope of the Corporate Transparency Act (the “CTA”). These developments are expected to reduce compliance burdens for many businesses, particularly domestically formed companies.
Key Takeaways
- Recent announcements from FinCEN and the Treasury Department have suspended enforcement of the CTA’s beneficial ownership information (“BOI”) reporting rule under the current FinCEN deadlines, for both domestic reporting companies and foreign reporting companies.[1]
- The March 2, 2025 announcement from the Treasury Department indicates that the CTA reporting rules will be modified such that only foreign reporting companies will be subject to the CTA following implementation of such rules.
CTA Scope Expected to be Narrowed
As previously reported in our February 20th legal alert, on February 18, 2025, CTA compliance again became mandatory – albeit not for long – following the stay of a nationwide preliminary injunction that was in effect prior to that time. FinCEN issued a release at that time modifying reporting deadlines and, notably, stating that it would be initiating a process to revise the BOI reporting rule to reduce the burden for lower-risk entities, including many U.S. small businesses. FINCEN stated that this revised approach aligns with broader government efforts to reduce the regulatory burden on businesses while maintaining the integrity of anti-money laundering frameworks.
On February 27, 2025, FinCEN released another announcement, stating that it would not issue fines, penalties, or take enforcement actions against any company for failing to file or update BOI reports by the then-current deadlines. The Treasury Department followed up on FinCEN’s release with its own announcement on March 2, 2025, stating that “with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information 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 either.” The release goes on to say the Treasury Department “will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.” The rules, if finalized in line with such announcement, are expected to remove all CTA obligations for domestic reporting companies.
This temporary non-enforcement policy, and the potential modifications to the reporting rule previewed by the Treasury Department, provide businesses with much-needed relief and additional time to understand potential future rule changes.
Subject to additional developments and final rulemaking, the status of the CTA is now as follows:
| For U.S. Citizens, Domestic Reporting Companies and Their Beneficial Owners | – No enforcement for failure to meet current BOI reporting deadlines. – Proposed Treasury Department rulemaking expected to eliminate CTA obligations completely. |
| For Foreign Reporting Companies | – No enforcement actions for failure meet current BOI reporting deadlines. – FinCEN Interim final rule for revised reporting deadlines expected to be issued prior to March 21, 2025. – Proposed Treasury Department rulemaking expected to narrow application of the CTA to foreign reporting companies only. |
Next Steps
Domestic reporting companies can expect to no longer have filing obligations under the CTA, absent rulemaking that is inconsistent with the Treasury Department’s announcement.
Foreign reporting companies should monitor regulatory developments and expect to potentially have to file some form of BOI reports in accordance with the forthcoming regulations referenced by FinCEN and the Treasury Department.
For more information on the CTA and certain key developments leading up to this point, please refer to Davis Graham’s past CTA legal alerts:
- The Corporate Transparency Act – Basics That Every Business Formed or Registered in the U.S. Needs to Know (released on November 16, 2023)
- Corporate Transparency Act – Reporting Deadline (January 1, 2025) for Established Reporting Companies Approaching (released on November 7, 2024)
- Corporate Transparency Act – Nationwide Injunction Temporarily Stays Reporting Deadline (released on December 6, 2024)
- Corporate Transparency Act – Reporting Again Required Following Stay of Preliminary Injunction (released on December 24, 2024)
- Update: Corporate Transparency Act Back in Force (released on February 20, 2025)
Contact Nathan Goergen, Sheila Forjuoh, or Erin Mooney with any questions.
[1] A “domestic reporting company” is defined under the CTA as any corporation, limited liability company, and any other form of entity created by filing with a secretary of state or similar office under the laws of a state or Indian tribe.
A “foreign reporting company” is defined under the CTA as a corporation, limited liability company, or other entity formed under the law of a foreign country that is registered to do business in the United States. Additional clarifications on this definition may be forthcoming as part of the Treasury Department’s proposed rulemaking.