U.S. Citizens and Domestic Entities Not Required to File BOI Reports
By: Anthony R. Jost
In a significant development, the U.S. Treasury Department announced on March 2, 2025 that it will suspend enforcement of the Corporate Transparency Act (“CTA”) against U.S. citizens and domestic reporting companies. This announcement marks a major shift in the implementation of the CTA, which was originally designed to combat illicit financial activities.
Key points to this policy shift by the Treasury Department include the following changes:
Suspension of Penalties:
The Treasury Department will not enforce any penalties or fines associated with the Beneficial Ownership Information (“BOI”) reporting rule under existing regulatory deadlines.
Scope Narrowing:
The Treasury Department intends to issue proposed rulemaking that will narrow the scope of the CTA to apply only to foreign reporting companies.
Protection for U.S. Entities:
U.S. citizens, domestic reporting companies, and their beneficial owners will not face penalties or fines, even after forthcoming rule changes take effect.
The CTA, signed into law in 2021, was aimed at targeting layered corporate structures that facilitate illicit activities such as money laundering and terrorism financing. However, its implementation has faced several challenges and legal hurdles since its adoption including court intervention and the Financial Crimes Enforcement Network (“FinCEN”) announcing its refusal to enforce compliance deadlines.
Based on these recent CTA developments, American businesses and taxpayers are no longer required to comply with the CTA’s reporting requirements. However, until the actual law is repealed or deemed unconstitutional, uncertainty will remain as to what is required of U.S. citizens, domestic reporting companies and their beneficial owners. The proposed changes will shift the CTA’s focus solely to foreign reporting companies registered to do business in the U.S. However, no announcements have yet been made as to what will happen to information already provided by entities that have filed under the CTA.
FinCEN has reported its intention to issue an interim final rule by March 21, 2025, which will further extend filing deadlines and potentially revise the scope of existing rules. The belief is that the further guidance from FinCEN will be directed to those foreign reporting companies registered to do business in the U.S. and exempt U.S. citizens, domestic reporting companies and their beneficial owners from reporting requirements.
While this announcement provides relief for U.S. citizens and domestic entities, it represents a significant shift in the implementation of the Corporate Transparency Act. We will provide further updates as FinCEN and the Department of Treasury offer additional guidance.
The attorneys at Riley Bennett Egloff continue to follow the development of CTA. If you have questions as to whether your company qualifies for an exemption under CTA, if you need help in completing the BOI Report (including identifying your “beneficial owners”), or if you have any other questions regarding the CTA, please contact us and we will be happy to assist you.
Anthony R. Jost, Partner
Tony Jost represents clients in various aspects of business, and civil litigation, including commercial, real estate, employment, and complex tort litigation in both federal and state court.
He counsels clients in commercial lease drafting, negotiation and enforcement, and real estate and business acquisition and financing. Tony further advises clients as to proper selection and formation of business entities, lender documentation, franchising, state and federal business regulatory matters, and general contractual matters.
Tony represents creditors in all formal bankruptcy proceedings in federal court, provides workout answers and advice on behalf of creditors, prosecutes collection claims, and defends creditors in various aspects, including but not limited to fraudulent conveyance and preference claims.
He provides answers, advice and advocacy in all aspects of business, commercial and litigation affairs with specific emphasis on the finance, health care, governmental, construction, transportation, and telecommunications sectors.
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Posted March 10, 2025, by Anthony R. Jost.