Treasury Department Announces Suspension of Corporate Transparency Act Enforcement for U.S. Entities or Their Beneficial Owners; Proposes New Limited Scope for Requirements

On March 2, 2025, the Department of the Treasury (the “Department”) announced that it will (i) “not enforce any penalties or fines associated with the beneficial ownership information reporting rule (the “BOI Reporting Rule”) under the existing regulatory deadlines” and (ii) will be issuing a “proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.”[i] Under the new rule, the Department will “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 March 2 announcement follows a February 27 FinCEN announcement which noted that, in advance of a March 21 filing deadline, “FinCEN intends to issue an interim final rule that extends BOI reporting deadlines” and that FinCEN would then proceed to engage in a “notice of proposed rulemaking anticipated to be issued later this year” to revise the BOI Reporting Rule to “minimize burden on small businesses.”[ii] The March 21 deadline had been announced by FinCEN on February 18, following extensive litigation which had put the prior deadlines on hold.[iii]

As explained in greater detail in prior Client Alerts,[iv] the Corporate Transparency Act and the BOI Reporting Rule[v] imposed reporting requirements on two types of “reporting companies”:[vi]

• Domestic Reporting Companies: corporations, limited liability companies and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
• Foreign Reporting Companies: entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

Pursuant to the March 2 announcement, we expect that the revised BOI Reporting Rule will only require “foreign reporting companies” to file their beneficial ownership information with FinCEN.

We will continue to monitor further developments.

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[i]       See U.S. Dep’t of the Treasury, Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies (Mar. 2, 2025), available here.

[ii]       See U.S. Dep’t of the Treasury FinCEN, FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines (Feb. 27, 2025), available here.

[iii]      See, e.g., Texas Top Cop Shop, Inc. et al. v. Garland et al., No. 4:24-CV-478, Dkt. 30 (E.D. Tex. Dec. 3, 2024), Smith, et al. v. U.S. Department of the Treasury, et al., No. 6:24-CV-336, Dkt. 30 (E.D. Tex. Jan. 7, 2025).

[iv]      See Paul, Weiss, New Filing Requirements Under the Corporate Transparency Act, available here; Paul, Weiss, The Corporate Transparency Act From an Estate Planning Perspective, available here; Paul, Weiss, The Corporate Transparency Act from an Estate-Planning Perspective (October 2024 Update), available here; Paul, Weiss, Corporate Transparency Act Is (Once Again) Enjoined; Reporting Companies Not Required to File Beneficial Ownership Reports, available here.

[v]       In January 2021, Congress enacted the CTA to combat the funding of illicit activities. The CTA was passed as Title LXIV (§§ 6401–03) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Public Law 116–283 (Jan. 1, 2021).

[vi]      See U.S. Dep’t of the Treasury FinCEN, Beneficial Ownership Information, available here.