Corporate Transparency Act Reporting Update
The article below was updated to reflect the FinCEN's non-enforcement statement included below.
The Corporate Transparency Act (CTA), enacted in 2021, introduced new reporting requirements for a broad range of businesses. Under the CTA, Reporting Companies must submit both initial and updated reports to the U.S. Treasury, disclosing their beneficial owners.
Recently, there has been significant back and forth regarding the CTA. You may recall that the law was reinstated by court order after a temporary pause. Shortly after its reinstatement, FinCEN issued new reporting deadlines, providing additional time for those who had not yet filed.
For some businesses, however, these revised deadlines remained challenging due to significant delays at the IRS in processing EIN applications—particularly for clients without a U.S. address or Social Security number. Since an EIN is often required to complete CTA filings, this uncertainty caused concern among affected businesses, as it seemed they could face severe penalties for circumstances entirely beyond their control.
FinCEN’s Statement on Enforcement:
WASHINGTON––Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.
No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.
FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.
U.S. Treasury’s Statement on Enforcement:
The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information 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 after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.
Do you need help filing your BOI report with FinCEN? Have questions about the BOI report? FinCEN Report offers an excellent and affordable service that can provide assistance with both filing and addressing most questions clients often have about the BOI. Click here to get started.
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