U.S. Treasury Pauses Enforcement of the Corporate Transparency Act

In a move that affects millions of U.S. businesses, the Treasury Department has announced that it is suspending enforcement of the Corporate Transparency Act (CTA) for domestic entities. This decision provides immediate relief to businesses that were facing looming deadlines and potential penalties for non-compliance.

The CTA, enacted to combat financial crimes like money laundering and tax evasion, required most businesses operating in the U.S. to report detailed beneficial owner information (BOI) to the Treasury’s Financial Crimes Enforcement Network (FinCEN). A “beneficial owner” is defined as an individual who directly or indirectly exercises substantial control over a company or owns or controls at least 25 percent of the ownership interests. Reporting companies are required to each beneficial owner’s full legal name, date of birth, address and an identifying number from a driver’s license or passport.

The BOI rule applies to an estimated 32 million small businesses and other U.S. entities. Penalties for willfully failing to file BOI reports on time or willfully filing false or fraudulent information can include up to $10,000 in fines and two years in federal prison.

The Treasury Department’s March 2, 2025 announcement states specifically that it will not enforce penalties or fines associated with the BOI reporting rule for U.S. citizens and domestic reporting companies. This suspension is part of a broader effort to reduce the regulatory burden on American taxpayers and small businesses. In conjunction with this suspension, the Treasury has announced it intends to issue a proposed rulemaking that will narrow the scope of the CTA to apply only to foreign reporting companies. This means that, for the time being, domestic businesses are not required to file BOI reports with FinCEN.

Though compliance requirements have been relaxed, the CTA does not authorize the Treasury to vacate or repeal its provisions. FinCEN is expected to issue an interim final rule to set new reporting deadlines and solicit public comments on how to revise the reporting requirements. An experienced business compliance attorney can help you understand your obligations under the CTA and advise you on adapting to any new rules that may emerge. 

The Law Offices of Donald W. Hudspeth P.C., located in Phoenix, Arizona, focuses on business law and can provide the necessary expertise to navigate the intricacies of regulatory compliance. Call us at 866-696-2033 or contact us online to schedule a consultation.