On March 2, 2025, the US Department of the Treasury ("Treasury") issued a press release clarifying that Treasury will not enforce any penalties or fines associated with the Corporate Transparency Act's ("CTA") implementing regulation ("Reporting Rule")1 under the existing deadlines and will "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."2 In the press release, Treasury also stated that it will be "issuing a proposed rulemaking that will narrow the scope of the [Reporting Rule] to foreign reporting companies only."3
The latest Treasury press release follows a Feb. 27, 2025, announcement by Treasury's Financial Crimes Enforcement Network ("FinCEN") 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 "until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed."4 FinCEN explained its intent to issue an interim final rule no later than March 21, 2025, that extends the Reporting Rule deadlines and to solicit public comment on potential revisions to existing BOI reporting requirements.
In light of these developments, there is no urgency to file BOI reports by March 21, 2025, as it is safe to assume that BOI report filings will not be required by that date. The forthcoming interim final rule is expected to extend the Reporting Rule's BOI report filing deadlines. Treasury's and FinCEN's statements have also put the public on notice to expect further modifications to the Reporting Rule to significantly narrow its scope for domestic reporting companies and US citizens. Such rulemaking could take several months or longer to finalize and the BOI reporting obligations for foreign reporting companies and non-US citizen beneficial owners may not be known during this time.5
Although Treasury and FinCEN have announced their intention not to impose penalties or fines for failure to report BOI under the CTA and Reporting Rule at this time, neither has been repealed or amended. Reporting companies that have not filed BOI reports should consider if this posture impacts any contractual agreements to comply with the CTA and/or Reporting Rule (this point may become moot if and when FinCEN extends the BOI reporting deadlines and/or narrows the scope of the Reporting Rule through rulemaking).
We will continue to monitor for developments relating to the CTA and Reporting Rule, including any legislation further affecting the CTA or the Reporting Rule.
Footnotes
1. For more information, please see our prior Alerts: "Corporate Transparency Act Update: Reporting Requirements Reinstated With March 21 Deadline," available here; "Corporate Transparency Act Update: Supreme Court Stays Nationwide Injunction but Reporting Still Voluntary," available here; "Corporate Transparency Act Update: Preliminary Injunction Reinstated and Reporting Voluntary Once Again," available< a href="/redirection.asp?article_id=1596756&company_id=478&redirectaddress=https://www.srz.com/en/news_and_insights/alerts/corporate-transparency-act-update-preliminary-injunction-against-cta-and-reporting-deadlines-reinstated" target="_blank">here; "Important Update - Corporate Transparency Act: Reporting Reinstated by Appellate Court and FinCEN Extends Deadline to Jan. 13," available here; "Corporate Transparency Act Update: Government Challenges Nationwide Preliminary Injunction & FinCEN Clarifies That Reports Are Voluntary," available here; and "Corporate Transparency Act Update: Nationwide Preliminary Injunction Enjoining Enforcement," available here.
2.Treasury, "Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies" (Mar. 2, 2025), available here.
3. It is not clear whether and to what extent these changes will impact state law requiring entities to file reports on beneficial ownership, including the New York LLC Transparency Act. That New York law is much narrower in scope than the CTA and Reporting Rule, but, notably, requires exempt entities to file an attestation of exemption. For more information, please see our prior Alert: "A Guide to the New York LLC Transparency Act," available here.
4. FinCEN, "FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines" (Feb. 27, 2025), available here.
5. Reporting companies that have already submitted BOI reports to FinCEN may wish to raise in comments to the forthcoming proposed rulemaking how FinCEN will store and use their and their beneficial owners' BOI.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
