The drama regarding enforcement of the Corporate Transparency Act (the “CTA”) continues. Originally designed to combat the creation of shell companies that could be used for illegal purposes, the CTA has been challenged and even suspended several times, only to be reinstated, and then impeded yet again. A recent court ruling, an announcement from the FinCEN agency, and a Treasury Department press release have added additional complexity to the mix. As things stand, businesses are awaiting a final final rule as they seek clarity on filing requirements and deadlines.
What Happened Recently?
On February 18, 2025, the U.S. District Court for the Eastern District of Texas stayed a previous injunction which had suspended the federal agency FinCEN’s enforcement of the beneficial ownership filing requirements under the CTA. FinCEN thereafter announced its intention to reinstate filing requirements, with a deadline of March 21, 2025 for most reporting companies.
On February 27, 2025, FinCEN announced several updates, summarized below:
- FinCEN will not issue any fines or penalties or take any other enforcement action against any companies based on any failure to file or update beneficial ownership information (“BOI”) reports 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.
- No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines.
- FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements.
A Press Release Adds to the Confusion
However, on March 2, 2025, the Treasury Department issued a press release stating that it was suspending enforcement of the CTA against U.S. citizens and domestic reporting companies. The Treasury Department also stated that it intended to narrow the scope of the BOI reporting, and that further guidance would be issued. The press release noted “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.”
FinCEN’s BOI website does not mention the existence of this press release, and states that reporting companies have until March 21 to file the reports. It is important to note that while the press release does not have the force of law, it signals the Trump Administration’s direction with respect to enforcement of the CTA. It is still unknown how FinCEN will approach the filing deadline and if it will provide any updates on enforcement.
What Now?
Until the next update, businesses can continue to take a “wait and see” approach. Smaller companies with a less burdensome filing requirement may decide to proactively file their report. It is unlikely, however, that the Treasury Department and/or FinCEN will be enforcing compliance or actively seeking out businesses not yet compliant.
There are numerous cases alleging the unconstitutionality of the law, which are still working their ways through the courts. Depending on how those cases are decided, the CTA may be officially dead within a matter of months.
Find our past coverage of the Corporate Transparency Act, in reverse chronological order, here, here, here, and here.