WASHINGTON — In the latest development to impact the Corporate Transparency Act and its mandates that businesses report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department announced Sunday that it has suspended enforcement of the CTA against U.S. citizens and domestic reporting companies.
Not only will it not enforce penalties or fines associated with the BOI reporting rule under existing regulatory deadlines, it will not enforce penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after forthcoming rule changes take effect.
Further, the Treasury Department will be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.
“This is a victory for common sense,” says U.S. Secretary of the Treasury Scott Bessent. “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.”
The CTA, passed in January 2021, went into effect January 2024. It was written to require most companies, including laundry business owners, to file ownership information with FinCEN in an effort to prevent illicit activities such as money laundering and drug trafficking through shell companies.
Filing reports by a Jan. 1, 2025, deadline was to be mandatory for anyone exercising substantial control or owning at least 25% of a reporting company. Companies that didn’t report could have faced civil and/or criminal penalties.
In mid-February of this year, FinCEN had reinstated the BOI reporting requirements with a new deadline of March 21, after a stay of court orders that had halted enforcement since early December.
On Thursday, FinCEN gave notice that it would not issue fines or penalties in connection with BOI reporting deadlines.
“No fines or penalties will be issued, and no enforcement activities will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed,” FinCEN says.
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