The United States Treasury Department significantly altered the status of the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) reporting requirements. On March 3, 2025, the U.S. Department of the Treasury announced it would not enforce the CTA’s reporting obligations against U.S. citizens and domestic reporting companies. This decision aligns with the Trump Administration’s stance that the law imposes undue burdens on low-risk businesses. The Treasury plans to issue a rule limiting the act’s application to foreign reporting companies only.

What does this mean for your business?

  1. Enforcement Suspension: The Treasury Department will not impose penalties on U.S. citizens or domestic companies that fail to comply with the CTA’s BOI reporting requirements. This suspension aims to reduce regulatory burdens on small businesses.
  2. Scope Limitation: The Treasury intends to propose a rule narrowing the CTA’s scope to apply solely to foreign reporting companies. This change seeks to address concerns about the law’s impact on domestic small businesses.
  3. Reporting Deadlines: While the enforcement of BOI reporting is suspended for most domestic entities, the Treasury has set a new deadline of March 21, 2025, for companies that are required to file BOI reports. FinCEN will assess its options for further modifying deadlines before this date.

Implications for Clients:

  • Domestic Entities: If your company is based in the U.S., you are currently exempt from BOI reporting obligations, and no penalties will be enforced for non-compliance. However, it’s advisable to stay informed about further regulatory changes.
  • Foreign Entities: If your company operates in the U.S. but is based abroad, be prepared to comply with BOI reporting requirements, as the Treasury’s proposed rule may affect you differently.

Recommended Actions:

  • Stay Informed: Monitor communications from the Treasury and FinCEN for updates on reporting requirements and deadlines.
  • Prepare for Potential Changes: Even if reporting is currently suspended, consider reviewing your company’s ownership structure and gathering necessary information to ensure readiness for any future reporting obligations.

Conclusion:

The Treasury’s recent announcement marks a significant shift in the enforcement and scope of the CTA’s BOI reporting requirements. Domestic entities are relieved from reporting obligations for the time being, while foreign entities should remain vigilant about potential changes. It’s crucial to stay updated and consult with professionals to navigate these evolving regulations effectively.

If you have any questions concerning the Corporate Transparency Act, or if you have any other business questions, please contact Angelo Bolcato, Practice Leader, at (973) 729-1880, or via email, abolcato@lcrlaw.com.