FinCEN Pauses Fines and Penalties for Non-Compliance with Beneficial Ownership Information Reporting Deadlines
What You Need to Know
Key takeaway #1
FinCEN announced yesterday that it will not fine or penalize Reporting Companies for failure to file or update beneficial ownership information (BOI) reports by a previously announced March 21, 2025, deadline.
Key takeaway #2
By March 21, 2025, FinCEN anticipates issuing an interim final rule with additional guidance on the BOI reporting requirements and new updated reporting deadlines.
Key takeaway #3
FinCEN intends to issue a notice of proposed rulemaking later this year that will focus on minimizing the burden of the BOI rule on small businesses, while ensuring it remains useful for “national security, intelligence, and law enforcement activities.”
Client Alert | 2 min read | 02.28.25
We previously reported that the Corporate Transparency Act’s Beneficial Ownership Information Reporting Rule (BOI Rule) was back in effect as of February 18, 2025, with a stay of the final nationwide block to enforcement. At that time, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the BOI Rule’s reporting deadline until March 21, 2025 (in cases where the originally-applicable deadline had expired) for entities required to report, which includes certain entities formed or registered to do business in the United States (Reporting Companies).
However, FinCEN altered course on February 27, 2025, announcing that “it will not issue any fines or penalties or take any other enforcement actions” against any Reporting Companies for failing to file or update BOI reports by that updated deadline. FinCEN explained that this pause will last until it issues an interim final rule further updating reporting deadlines and providing new guidance around the BOI Rule’s requirements. FinCEN plans to issue this interim final rule no later than March 21, 2025.
FinCEN also intends to solicit public comments on potential revisions to the BOI Rule, which it will consider “as part of a notice of proposed rulemaking anticipated to be issued later this year” that will attempt to minimize the burden of the BOI rule on small businesses, while ensuring it remains useful for “national security, intelligence, and law enforcement activities.”
Implications
At present, Reporting Companies may choose to voluntarily report BOI in compliance with the March 21, 2025, reporting deadline, but FinCEN will not pursue fines or penalties for failure to do so, at least until new deadlines are announced.
It also remains to be seen whether FinCEN’s forthcoming interim final rule will impact or render moot the various pending court challenges to the Corporate Transparency Act (CTA) and FinCEN’s BOI Rule.
Crowell & Moring will continue to monitor and provide updates on the status of the CTA as appropriate.
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