True to form, those following the Corporate Transparency Act (the “CTA”) have received yet another round of confusing and contradictory information regarding the enforcement of the CTA from the federal government. While it is clear that foreign entities or entities with foreign owners should file their beneficial ownership information no later than March 21, 2025, the government has stated that it will not pursue enforcement of the CTA against U.S. citizens or U.S. companies.
On February 18, 2025, a Texas federal court lifted the last remaining nationwide preliminary injunction of the CTA in Smith v. U.S. Department of the Treasury. The Financial Crimes Enforcement Network (“FinCEN”), responded on February 19, 2025, by publishing a statement on its website granting a 30-day extension of applicable filing deadlines. For most reporting companies, the new deadline to file initial, updated, or corrected BOI reports is now March 21, 2025.
However, on March 2, 2025, the U.S. Treasury Department, which controls FinCEN, announced that it will not enforce the reporting obligations under the CTA against U.S. citizens or entities. The statement made by the Treasury makes it clear that it intends for the CTA beneficial ownership reporting requirements to apply only to foreign entities or foreign owners of U.S. entities.
It is still unclear what the fate of the CTA will be, but recent statements and efforts by the U.S. Federal Government indicate a shift in the sentiment of lawmakers and administrative officials.
In an alert posted on its website, FinCEN indicated it “will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” FinCEN is also considering revising its BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.
In a March 2, 2025, press release, the Secretary of the U.S. Treasury, Scott Bessent, stated, “This is a victory for common sense… 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.”
On February 10, 2025, the House of Representatives passed H.R. 736, the Protect Small Businesses from Excessive Paperwork Act of 2025, which extends the initial filing deadline for entities formed prior to January 1, 2024, to January 1, 2026.
We continue to recommend that companies keep their beneficial ownership information up to date. Staying informed is also imperative as the enforcement and status of the CTA are changing regularly.
