Listen to this articleAfter several months of back-and-forth court decisions and extended deadlines, the U.S. Treasury Department announced it won’t enforce the Corporate Transparency Act for U.S. citizens and domestic reporting companies.
Last month, the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department, set a new deadline of March 21 for corporations and limited liability companies (LLCs) to file beneficial ownership information with the federal government. And though the deadline is still in place on the FinCEN website, the Treasury Department announced last week it will levy no penalties or fines for businesses that don’t file their Beneficial Ownership Information (BOI) reports by March 21.
In addition, the Treasury Department said in a statement that it will narrow the scope of the rule to foreign reporting companies only.
“This is a victory for common sense,” Treasury Secretary Scott Bessent said in the statement. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
The reporting requirements were mandated by the Corporate Transparency Act (CTA) enacted by Congress in 2021 to curb illicit finance. The CTA required that all companies or LLCs “created in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe or a foreign company registered to do business in any U.S. state or Indian tribe” file beneficial ownership information with FinCEN.
The initial deadline to file BOI with FinCEN was Jan. 1, but a Texas court issued a preliminary injunction that temporarily suspended enforcement. After that, the U.S. Court of Appeals for the Fifth Circuit lifted the injunction on Dec. 23, 2024, however, three days later a different panel of the U.S. Court of Appeals for the Fifth Circuit issued an order vacating the court’s Dec. 23 order granting a stay of the preliminary injunction.
Eventually the case when all the way up to the U.S. Supreme Court which ruled on Jan. 23 that the government could indeed require the ownership information, though the Treasury Department has now suspended enforcement of the rule.
Twenty-three types of entities were exempt from beneficial ownership information reporting requirements, including publicly traded companies, nonprofits and certain large operating companies, according to FinCEN.
Last year, New York State adopted a similar law called the LLC Transparency Act which requires certain LLCs to disclose beneficial ownership information to the New York State Department of State. The state law doesn’t take effect until Jan. 1, 2026, and LLCs formed or authorized to do business before that date have until Jan. 1, 2027 to make their initial filings.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
