The U.S. Treasury Department announced that it will not require U.S. corporations, limited liability companies, or other U.S. business entities to comply with the Corporate Transparency Act (CTA).
The CTA requires that most smaller corporations, limited liability companies, and some other business entities(all of which are termed “reporting companies”) file beneficial ownership information reports (BOI reports) with the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN).
The BOI reports identify and provide contact information for the human beings who own or control the entity—the “beneficial owners.”
This information is intended to be used only by law enforcement to combat money laundering, drug trafficking, and other illegal activities.
On March 2, 2025, the Treasury Department issued a press release announcing that it will not enforce any of the CTA’s penalties against U.S. citizens or domestic reporting companies or their beneficial owners who fail to file BOI reports.
Treasury stated that it was taking this step “in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”
As a result of the Treasury Department’s announcement, domestic reporting companies do not have to file BOI reports with FinCEN. These include all corporations and LLCs formed by U.S. citizens in any state. The previously announced March 21, 2025, deadline for filing BOI reports is no longer in effect.
On March 21, FinCEN posted its press release confirming details of the Treasury Department’s announcement and announcing its interim final rule.
On March 26, 2025, FinCEN posted an alert with its agreement with the Treasury Department’s press release.
Foreign Reporting Companies Remain Subject to CTA
Treasury’s press release made clear that foreign reporting companies will continue to be subject to the CTA.FinCEN submitted an interim final rule to the
Federal Register that narrows the scope of the reporting rule to apply to foreign reporting companies only.
With limited exceptions, the interim final rule does not change the existing requirement for foreign reporting companies to file BOI reports, but it extends the foreign company deadline to file initial BOI reports and to update or correct previously filed BOI reports to April 25, 2025.
Exemption for U.S. persons. The interim final rule exempts foreign reporting companies from having to report the BOI of any U.S. persons who are beneficial owners of the foreign reporting company. It also exempts U.S. persons from having to provide such information to any foreign reporting company for which they are a beneficial owner.
Under the existing reporting rules, a foreign reporting company is any corporation, LLC, or other entity formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or similar official.
For example, a Canadian corporation that qualifies to do business in California by filing the appropriate document with the California secretary of state must file a BOI report.
There are only about 71,000 such foreign reporting companies. In contrast, there are more than 32 million U.S. reporting companies.
A Long and Tortured Journey to Futility
The CTA took effect on January 1, 2024. Reporting companies in existence before 2024 originally had until January 1, 2025, to file their BOI reports.
The CTA met with resistance, and numerous lawsuits were filed challenging its constitutionality on privacy, First Amendment, search and seizure, and other legal grounds. The CTA was stopped in its tracks in December 2024 when two federal district courts issued injunctions enjoining enforcement of the CTA nationwide pending a final determination of whether the law was constitutional.
One injunction was stayed (lifted) by the U.S. Supreme Court, and the second (Smith case) was stayed by the Eastern District Court of Texas. FinCEN then announced that it would issue a new rule extending the BOI reporting deadline. That’s when the Treasury Department stepped in and issued its press release.
Is This Legal?
Maybe. The CTA gives the secretary of the treasury authority (with approval of the attorney general and the secretary of homeland security) to issue regulations granting exemptions to the CTA’s reporting requirements beyond those specified in the statute by Congress. The Bank Secrecy Act grants the treasury secretary broad authority to unilaterally establish “appropriate” exemptions to Bank Secrecy Act requirements, including the CTA BOI reporting requirements.
Moreover, as a practical matter, the president, as head of the executive branch, has the discretion to set law enforcement priorities. Arguably, this means that the Trump administration can elect not to enforce part of the CTA, even though it remains law.
Nevertheless, there is a good chance that the administration’s decision not to enforce the CTA against U.S.entities will be challenged in court.
What About the Court Cases?
Some 13 cases have been filed across the country challenging the constitutionality of the CTA. Three federal district courts, including one in early March, have held that the CTA is unconstitutional. Two of these cases are currently on appeal to federal appellate courts.
These cases all involved U.S. reporting companies. So, should they be dismissed because they are moot at this point? Apparently not. One district court has already held that these constitutional challenges are not moot because Treasury’s announcement does not carry the force of law.
The plaintiffs in these cases may wish to pursue them because as long as the CTA remains on the books, a future presidential administration (i.e., 2029 or later) could establish a new rule requiring domestic reporting companies to file BOI reports. Ultimately, the U.S. Supreme Court will likely have to decide whether the CTA is constitutional.
What About BOI Reports Already Filed?
About 10 million BOI reports have already been filed with FinCEN by U.S. reporting companies.
The Treasury Department has not indicated what it will do with this data—destroy it or keep it available for lawenforcement use in combating money laundering and other crimes.
In any event, U.S. reporting companies and U.S. persons that have filed BOI reports are no longer required toupdate them when there are ownership or other changes.
Takeaways
The Treasury Department suspended enforcement of the CTA for U.S. companies, effectively ending the BOI reporting requirement for domestic corporations and LLCs.
U.S. reporting companies and U.S. persons no longer need to file or update BOI reports, and the March 21, 2025, deadline is no longer in effect.
But foreign companies registered to do business in the U.S. must still comply with BOI reporting rules, though their deadline has been extended to April 25.
Legal challenges to the CTA continue, and a future administration could reinstate domestic enforcement. Fornow, U.S. small businesses can breathe a sigh of relief—but the story isn’t over yet.
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