The Treasury Department announced on March 2nd that it does not intend to enforce any penalties or fines against either U.S. citizens or domestic reporting companies and their beneficial owners under the Corporate Transparency Act ("CTA"). See the announcement here. Additionally, Treasury provided that it intends to issue a proposed rule that will narrow the scope of the CTA to only foreign reporting companies.
Just a few days before on February 27th, the Financial Crimes Enforcement Network announced it would not take any actions to enforce upcoming beneficial ownership reporting deadlines and that it intended to revise deadlines and reporting requirements. Treasury's March 2nd statement obviously goes much further.
The legal challenges to the enforceability of the CTA have been much chronicled. It is likely that the constitutionality of Treasury's decision to limit the scope of the CTA will also be challenged, based on subsequent comments by various interest groups.
We now await the Treasury Department's issuance of the proposed rule. At this moment, it appears that the CTA will not be enforced against U.S. citizens or domestic reporting companies and their beneficial owners.
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