In yet another update to the ongoing saga of the Corporate Transparency Act (CTA), the Financial Crimes Enforcement Network (FinCEN), the agency of the U.S. Department of the Treasury (“Treasury Department”) that enforces the CTA, announced on February 27, 2025, that it would not issue any fines or penalties or take any other enforcement actions against companies for a failure to provide beneficial ownership information (BOI) until a new interim final rule on the CTA is released.

On March 2, 2025, the Treasury Department provided further guidance on the CTA, announcing that it would halt enforcement of the CTA with respect to U.S. citizens and domestic reporting companies.

In its press release announcing this update, the Treasury Department stated that it will not enforce any penalties or fines associated with the BOI reporting requirements under the existing CTA rules; however, it will also issue a new proposed rule (to be released no later than March 21, 2025, according to FinCEN’s February 27, 2025, announcement) that will narrow the scope of the reporting requirements under the CTA to “foreign reporting companies only.”

Under the CTA, a “foreign reporting company” is any entity that is formed under the law of a foreign country and has registered to do business in the United States by the filing of a document with a secretary of state or any similar office, while a “domestic reporting company” is any entity that is formed in the United States by the filing of a document with a secretary of state or any similar office. We note, however, that the Treasury Department could seek to modify these definitions as part of its new proposed rule.

The immediate takeaway, based on this guidance from the Treasury Department, is that all domestic reporting companies are no longer required to file BOI and will not be subject to liability for not filing.

We will continue to monitor additional developments regarding the CTA, including the expected further guidance from the Treasury Department, to determine what the CTA filing requirements and deadlines will be for foreign reporting companies.

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