Just when you thought the dust was settling, the U.S. Department of the Treasury (Treasury Department) issued a press release on Sunday, March 2, in connection with the rollout of the Corporate Transparency Act (CTA). As detailed in our prior client memo, new compliance deadlines, with March 21, 2025 being the deadline applicable to most reporting companies, were instituted by FinCEN in the wake of a federal district court in Texas staying the last nationwide preliminary injunction.[1]
On February 27, 2025, FinCEN published new guidance, announcing that "it will not issue any fines or penalties or take 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."[2] FinCEN intends to issue the interim final rule by March 21, 2025.[3]
Following FinCEN's latest announcement on March 2, 2025, the Treasury Department issued a brief, though significant, press release:[4]
The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further 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 either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. 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.
"This is a victory for common sense," said U.S. Secretary of the Treasury Scott Bessent. "Today's action is part of President Trump's bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy."
The Treasury Department's press release leaves a number of questions unanswered, including what happens to beneficial ownership information previously submitted to FinCEN that may no longer be subject to enforcement actions, how this affects the numerous pending federal court cases, what the scope of the new reporting regulations will be, and how the suspension of enforcement will affect and be treated by future administrations. In light of these and other uncertainties, we continue to recommend that reporting companies be prepared to file their BOI reports but monitor this ever-fluid situation.
[1] See Smith v. U.S. Dept. of the Treasury, 2025 WL 41924 (E.D. Tx., Jan 7, 2025).
[2] Fin. Crimes Enf't Network, FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines (Feb. 27, 2025), https://www.fincen.gov/news/news-releases/fincen-not-issuing-fines-or-penalties-connection-beneficial-ownership.
[3] Id.
[4] U.S. Dep't of the Treasury, Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies (Mar. 2, 2025), https://home.treasury.gov/news/press-releases/sb0038.