Client Alert: FinCEN Suspends Enforcement of the Corporate Transparency Act Pending Final Rule
On February 27, 2025, FinCEN announced it will not impose fines, penalties, or other enforcement actions for failures to file or update beneficial ownership information (BOI) reports under the Corporate Transparency Act (CTA) by current deadlines. FinCEN will not enforce the CTA until an interim final rule takes effect and its new deadlines pass. This decision aligns with Treasury’s efforts to ease regulatory burdens while focusing BOI reporting on entities posing the highest law enforcement and national security risks.
FinCEN plans to issue an interim final rule extending BOI reporting deadlines and providing updated guidance by March 21, 2025. Additionally, FinCEN will seek public input on potential revisions to BOI reporting requirements and will consider this feedback in a proposed rulemaking later this year, aiming to reduce burdens on small businesses while ensuring BOI remains valuable for national security, intelligence, and law enforcement purposes, including potential deadline modifications.
Legislative Developments:
Along with FinCEN’s planned interim final rule, Congress has also introduced bills to modify CTA deadlines:
- The “Protect Small Businesses from Excessive Paperwork Act of 2025” (H.R. 119-736), introduced by Rep. Zachary Taylor (R-IA), proposes extending the filing deadline for companies formed before January 1, 2024, to January 1, 2026. A companion bill (S. 505) was introduced in the Senate.
- While these bills aim to provide relief for older entities, they do not address compliance requirements for companies formed in 2024 and beyond, leaving their deadlines subject to FinCEN’s rulemaking.
- Similar bills introduced in prior sessions of Congress, including efforts to repeal the CTA altogether, failed to advance.
Recommended Next Steps for Businesses:
While companies are not currently required to file BOI reports, the filing portal remains open. Businesses should take the following steps in preparation for the fast-approaching interim final rule:
- For Clients Who Have Already Filed:
No immediate action is required, unless beneficial ownership information has changed since the initial filing. Clients must also continue to monitor any changes in beneficial ownership, as future filings may be needed to update BOI reports.
- For Clients Who Have Not Filed:
Companies that have not yet submitted their initial BOI report should be prepared to comply once FinCEN finalizes its interim rule. While enforcement is currently on hold, businesses subject to the Corporate Transparency Act (CTA) should take proactive steps to ensure they are ready when new deadlines take effect, such as verifying beneficial ownership details.
Next Steps
CCM will continue monitoring further developments. For additional resources, visit the CCM CTA Resource Library.
