On February 27, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced that it would not issue any fines or penalties or take any other enforcement actions against any companies based on a failure to file or update beneficial ownership information (“BOI”) reports pursuant to the Corporate Transparency Act (the “CTA”) by the current deadlines until a new interim final rule on BOI reporting becomes effective.
On March 2, 2025, the Department of the Treasury announced that not only will it not enforce any penalties or fines associated with the BOI reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners even after the forthcoming rule changes take effect. The Treasury Department’s upcoming proposed rulemaking will narrow the scope of the BOI reporting rule to foreign reporting companies only.
What does this mean for reporting companies?
Per the Treasury’s announcement, “domestic reporting companies” or their beneficial owners will not face fines or penalties for failure to file or update BOI reports. Under current regulations, a “domestic reporting company” is any entity that is a corporation, limited liability company, or any other entity created by the filing of a document with a secretary of state or any similar office under the law of a U.S. state or Indian tribe. Treasury’s suspension of enforcement does not extend to “foreign reporting companies,” which are entities formed under the law of a foreign country and registered to do business in any U.S. state or tribal jurisdiction.
Domestic and foreign reporting companies that have already filed reports do not need to do anything. Domestic reporting companies that have not filed will not face fines or penalties for failure to file. Foreign reporting companies will continue to face fines or penalties for failure to file or update BOI reports.
It is unknown what effect the Treasury’s announcement will have on the various pending court cases involving the CTA or legislative efforts to delay or repeal the CTA.
