Overview
On March 2, 2025, the Department of the Treasury put out a statement signaling it intends to make major changes to the implementation of the Corporate Transparency Act (CTA). The Treasury statement follows a prior statement on February 27 from the Financial Crimes Enforcement Network (FinCEN), the Treasury component with primary responsibility for CTA implementation, announcing FinCEN intends to issue a new interim final rule by March 21, 2025 and that it would not issue fines or penalties for failure to file beneficial ownership reports by the current deadlines, including the current, March 21, 2025 deadline for reporting companies created before January 1, 2024. In its March 2 statement, Treasury went further, explaining that FinCEN will "not enforce any penalties or fines against US citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either" and that FinCEN will be issuing a proposed rule to "narrow the scope of the rule to foreign reporting companies only."
President Trump then posted on Truth Social, "…Treasury is now finalizing an Emergency Regulation to formally suspend this rule for American businesses. The economic menace of BOI reporting will soon be no more."
While these planned changes are likely welcome news for many domestic reporting companies, the implementation will be key and most of the details remain unclear at this point.
While Treasury's statement that it will not pursue enforcement actions is important, that statement in itself should not be viewed as a substitute for FinCEN issuing a formal rule extending or removing the current deadlines. In the absence of such a rule, a failure to file by March 21 (for existing reporting companies) would still be a technical violation, even if Treasury exercises its discretion not to pursue enforcement actions for those violations. Reporting companies should monitor this situation closely and it may be prudent for companies to be prepared to file by March 21 in the event FinCEN does not issue a rule by that date or that the rule it issues does not clearly extend or remove the relevant deadlines. The details of any extension or revocation of the reporting requirement may be particularly important for companies that are required to make compliance-with-laws representations or covenants.
We continue to closely monitor the situation and will provide further updates as new information becomes available.
Please reach out to a member of your Steptoe legal team or email us at CTA@steptoe.com if you have questions or would like help in complying with your CTA reporting obligations.
