U.S. Treasury Department Announces It Will Not Enforce the Corporate Transparency Act and BOI Reporting Rule Against U.S. Citizens and Domestic Reporting Companies

On February 28, 2025, we reported that the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) paused enforcement actions for entities required to report under the CTA’s BOI Rule (Reporting Companies) for failure to file or update beneficial ownership information (BOI) reports by a previously-announced March 21, 2025, deadline. FinCEN had explained that the pause would last until it issued an interim final rule further updating reporting deadlines and providing new guidance around the BOI Rule’s requirements.

On March 2, 2025, Treasury announced in a press release (Release) that “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 Release explained that Treasury will issue a proposed rulemaking that will narrow the scope of the BOI Rule to “foreign reporting companies,” which is currently defined in the BOI Rule as entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office. 

With respect to the forthcoming rulemaking, the CTA gives Treasury discretion to exempt certain types or classes of entities from the CTA’s reporting requirements under certain conditions, namely, if Treasury determines that requiring BOI information from a class of entities “would not serve the public interest” and “would not be highly useful in national security, intelligence, and law enforcement agency efforts to detect, prevent, or prosecute money laundering, the financing of terrorism, proliferation finance, serious tax fraud, or other crimes.” 

Implications

Based on its March 2, 2025 announcement, it seems possible that Treasury may be considering the use of this discretionary authority to considerably narrow the scope of BOI reporting requirements. It also remains to be seen whether Treasury’s forthcoming rule will impact or render moot the various pending court challenges to the CTA and current BOI Rule, or affect the pending HR 736, a bill that would—if enacted into law—extend the reporting deadline for entities that are a “small business concern,” as defined under 15 U.S.C. 632, to January 1, 2026. 

Given the repeatedly-changing regulatory landscape around the CTA and BOI Rule, Reporting Companies—both foreign and domestic—should continue to remain alert for further developments. Crowell & Moring will continue to monitor and provide updates on the status of the CTA as appropriate. Please do not hesitate to reach out to your Crowell & Moring contacts or the authors of this alert with questions.