Corporate Transparency Act Enforcement Suspended Yet Again
In yet another dramatic turn, the Financial Crimes Enforcement Network (FinCEN) has suspended enforcement of the Corporate Transparency Act (“CTA”) against U.S. Citizens and Domestic Reporting Companies.
After much legal back-and-forth, with temporary injunctions followed by stays of those injunctions, a U.S. District Court ultimately stayed the nationwide injunction, extending the compliance deadline to March 21, 2025.
On March 2, 2025, the U.S. Treasury Department announced it would not enforce any penalties or fines associated with the Beneficial Ownership Information (“BOI”) reporting rule, a key requirement under the CTA.
In a press release, Treasury officials confirmed they would not impose fines on U.S. citizens or domestic reporting companies, effectively pausing the reporting obligations for the time being.
With the Treasury’s latest move, domestic businesses are temporarily not required to meet the CTA’s reporting requirements, offering a reprieve for companies struggling with compliance. The agency said that it intends to issue new rulemaking proposals to focus the CTA’s enforcement solely on “foreign reporting companies.” It remains to be seen whether enforcement would include foreign individuals/entities holding ownership interests in domestic reporting companies, as presumably intended by the original law.
The Treasury Department has not yet provided a timeline for issuing its proposed rule changes. However, even though the Treasury has decided not to enforce the CTA right now, the underlying statute remains in effect, meaning Congress will still need to take some action to repeal or modify the existing law. How and when that might happen remains to be seen.
As noted above, the biggest takeaway from the Treasury’s announcement is a shift in enforcement priorities. Moving forward, the agency plans to limit BOI reporting obligations to foreign reporting companies, signaling a departure from the previous broad enforcement approach. Treasury officials said they intend to issue new regulations to formally adjust the CTA’s scope, concentrating efforts on international entities rather than U.S.-based businesses.
While the full implications of this change remain to be seen, the decision is expected to ease compliance concerns for American companies. Meanwhile, foreign businesses should prepare for heightened scrutiny as the Treasury reshapes its corporate transparency policies.