Current Status of the Corporate Transparency Act
As most of us know by now, the Corporate Transparency Act (“CTA”) is a federal law aimed at requiring certain businesses to file Beneficial Ownership Information (“BOI”) with the Treasury’s Financial Crimes Enforcement Network (“FinCEN”). As most of us also know, since it was enacted the CTA has faced lawsuits questioning its constitutionality.
Current Federal Situation (2025–2026)
- Major regulatory narrowing
In 2025, the U.S. Treasury/FinCEN issued an interim final rule that narrowed the scope of the CTA so that the BOI reporting requirement now generally applies only to foreign entities that are registered to do business in the U.S., not to most U.S. domestic companies and beneficial owners. This rule effectively exempts U.S. domestic companies and individuals from BOI reporting requirements under the CTA as it’s currently written and implemented.
- Enforcement paused for domestic entities
The Treasury publicly stated in March 2025 that it would not enforce penalties or fines for U.S. domestic companies or beneficial owners for failure to file BOI reports under the existing regulatory setup and is moving forward with the narrowed rulemaking.
- Legal challenges and uncertainty
The CTA has been subject to ongoing legal challenges. Courts have issued injunctions and stays while the law’s constitutionality and scope have been litigated, leading to periods where enforcement was paused or reinstated. That complex litigation history continues to create uncertainty around the final scope and enforceability of the CTA.
- Implementation in flux
As of 2026, federal rules are “in flux,” and agencies and courts may continue evolving how the CTA works in practice. Federal implementation has shifted compared with the original broad reporting regime envisioned when the law took effect on January 1, 2024.
Where Things Stand Practically
Domestic U.S. Companies
Under the current Treasury/FinCEN interim rule, most U.S.-formed entities and U.S. beneficial owners are not required to report BOI and enforcement of such reporting against them has been suspended for now.
Foreign-owned/Foreign entities
Non-U.S. entities that have registered to do business in the U.S. may still have BOI reporting obligations under the narrowed rule.
Court/Litigation risk
Because of multiple court challenges and injunctions, the CTA’s reporting rules have changed repeatedly, and further litigation could shift enforcement prospects again.
State-Level Actions
Some states (e.g., New York) have enacted their own “transparency” or beneficial ownership reporting laws, partially in response to federal changes. The NY law may impose separate requirements on certain LLCs or other entities at the state level starting in 2026 and beyond.
What is the Bottom Line
The CTA remains federal law, but its implementation has been significantly narrowed, especially for U.S. domestic companies and individuals and enforcement is currently not being pursued for domestic reporting companies. The biggest ongoing requirements apply mainly to foreign entities registered in the U.S., and the legal/regulatory framework continues to evolve as courts and rule-making proceed.