Due to the February 17, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), the prior enjoinment of the Corporate Transparency Act’s reporting requirements has been ended. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has given reporting companies (which include many small businesses that cannot meet the $5 million in revenue and more than 20 full-time employee exemption) that were in existence prior to January 1, 2025, until March 21, 2025, to get their reports filed with FinCEN using the BOI E-Filing site.
FinCEN is expected to provide an update before March 21 on further modifications to the deadline, recognizing that companies may need additional time to comply.
Additionally, there may be some relief coming for small businesses. FinCEN stated that: “Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”
Congress has also taken an interest on the impact of the reporting on many small, legitimate businesses and on February 11, the House passed H.R. 736, Protect Small Businesses From Excessive Paperwork Act of 2025, which extends the deadline for filing ownership reports to January 1, 2026, for companies established prior to January 1, 2024. The Senate has yet to vote on the Act and has referred to its Committee on Banking, Housing and Urban Affairs.
While President Trump’s new administration has not publicly relayed its stance on the CTA, he opposed it during his first term. However, the FinCEN statement would appear to signal initial agreement with enforcement.
The Corporate Transparency Act passed in 2021 with bipartisan support, mandating certain companies and trusts file Beneficial Ownership Information (BOI) with FinCEN or face financial and criminal penalties. The Act’s goal is to obtain information about the ownership of certain companies as a means to uncovering avenues for illegal money laundering. Small business groups in certain states have opposed it on Constitutional grounds and many have viewed it as an unfair cost to and exposure of small business owners due to its exemption for larger operating companies ($5 million in revenue and more than 20 full-time employees). It is estimated the requirements will apply to 32 million companies. Harris Beach Murtha issued a fact sheet on the CTA when it took effect.
