Perspectives

(Another) Update to the Corporate Transparency Act

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As you are aware, the Corporate Transparency Act (CTA) has been the subject of ongoing legal challenges and regulatory developments. Recent announcements from the Financial Crimes Enforcement Network (FinCEN) and the Treasury Department have further impacted the enforcement and reporting obligations under the CTA. Given these updates, we want to provide clarity on what this means.

Key Developments

  • On February 27, 2025, FinCEN announced it will not be enforcing the beneficial ownership information (BOI) reporting obligations under the CTA until a forthcoming interim final rule takes effect.
  • On March 2, 2025, the Treasury Department further confirmed that FinCEN will not impose penalties or fines for failing to file BOI reports, both under the existing deadlines and once the new rule is in place.
  • The anticipated rule changes will likely narrow the CTA’s scope, requiring only foreign reporting companies to submit BOI reports, thereby exempting most U.S. businesses.
  • These announcements follow a court decision in Smith, et al. v. U.S. Department of the Treasury, which initially reinstated CTA reporting obligations but was subsequently addressed by FinCEN’s decision to delay enforcement.
  • FinCEN has committed to issuing an interim BOI Reporting Rule by March 21, 2025, and will open a public comment period for potential revisions.

What This Means for Compliance

For now, compliance with the CTA’s BOI reporting requirements is voluntary, and businesses can decide whether to submit their reports by the current deadline or wait for further regulatory clarity. However, businesses should still consider:

  • Preparing the necessary BOI information in case reporting becomes mandatory under the final rule.
  • Monitoring further regulatory updates, as the scope of required compliance could shift again.

Next Steps

While waiting for further guidance, businesses should take this opportunity to ensure their internal records and policies are current:

  • Review corporate records – Confirm that corporate formation documents, ownership records, and governance materials are up to date.
  • Assess contracts and agreements – Ensure business agreements are aligned with the most recent regulatory requirements.
  • Update compliance policies – Verify internal compliance procedures remain effective and adaptable to potential changes.
  • Organize beneficial ownership records – Maintain accurate ownership details to streamline future compliance efforts.

WFJ will continue monitoring developments and will provide updates as more details emerge. If you or your clients have any questions about CTA compliance, or if you would like assistance in preparing for potential obligations, please reach out.

Wagner, Falconer & Judd remains committed to ensuring that you and your clients are informed and prepared to navigate these evolving regulatory requirements.

 

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