Insight Treasury Department Suspends Enforcement of Corporate Transparency Act

The whiplash and uncertainty regarding the enforcement and applicability of the Corporate Transparency Act (“CTA”) continues.

For background, the Financial Crimes Enforcement Network (“FinCEN”),  the government agency tasked with administering and enforcing the CTA and the CTA’s Beneficial Ownership Information (“BOI”) reporting requirements, is a bureau of the U.S. Department of the Treasury.

According to a Treasury Department March 2, 2025 release, the Treasury Department has indicated it will suspend enforcement of the CTA concerning U.S. citizens and domestic reporting companies. This policy decision means that penalties and fines associated with the BOI reporting rules will not be enforced under the existing regulatory deadlines – including the updated March 21, 2025, deadline set by FinCEN according to its February 18, 2025 notice.

The Treasury Department has indicated plans to issue proposed rulemaking that narrows the scope of the CTA to apply solely to foreign reporting companies. It’s possible we will see these proposed rules on or before March 21, 2025. Furthermore, the Treasury Department has indicated that once forthcoming rule changes take effect, it will continue to refrain from enforcing penalties against U.S. citizens, domestic reporting companies, or their beneficial owners. For reference, generally, a domestic or foreign reporting company is defined under the CTA as follows:

• A “domestic” reporting company means any entity that is: (i) a corporation; (ii) a limited liability company; or (iii) created by the filing of a document with a secretary of state or any similar office under the law of a State or Native American tribe.
  
  
• A “foreign” reporting company means any entity that is: (i) a corporation, limited liability company, or other entity; (ii) formed under the law of a foreign country; and (iii) registered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a State or Native American tribe.

Ultimately, despite current enforcement policies, the new proposed rules have yet to be seen, and policies are subject to change. Also, voluntary reporting still remains an option. We encourage businesses to closely monitor the FinCEN and Treasury Department websites for ongoing updates.

For additional background information on the CTA, please see our previous updates:

• Corporate Transparency Act Update – Nationwide Preliminary Injunction Lifted Again (02/25/2025)
  
  
• Corporate Transparency Act Update – Nationwide Preliminary Injunction Reinstated (12/30/2024)
  
  
• Corporate Transparency Act Update – Nationwide Preliminary Injunction Lifted (12/24/2024)
  
  
• Corporate Transparency Act Update – Court Ordered Preliminary Injunction Halts Enforcement of the Corporate Transparency Act Nationwide (12/23/2024)
  
  
• Corporate Transparency Act – Beneficial Ownership Information Reporting Requirement (12/13/2023)

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