CTA On Hold: The Saga Continues
In the latest twist in the Corporate Transparency Act (CTA) saga, the Treasury Department has announced further restrictions to the enforcement of the CTA – particularly as it would have applied to U.S. citizens and to domestic companies and their beneficial owners.
Specifically, on March 2, 2025, the Treasury Department stated that it will not enforce any penalties or fines associated with beneficial ownership reporting under the CTA against U.S. citizens or domestic reporting companies or their beneficial owners even after forthcoming interim final rule changes take effect. This comes days after the Financial Crimes Enforcement Network (FinCEN) announced on February 27, 2025 that it will not issue any fines or penalties or take any other enforcement actions against any companies until an interim final rule is issued, expected on or before March 21, 2025.
The Treasury Department has also stated that it will be issuing a proposed rulemaking intended to narrow the scope of the CTA reporting requirements to foreign companies only. While there cannot be certainty until the forthcoming proposed rule is actually issued, the Treasury Department's statement has led many to speculate that the CTA will become irrelevant (or perhaps voluntary) for U.S. citizens and domestic reporting companies and their beneficial owners.
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