Department of Treasury Announces Halt in Enforcement of the CTA Against U.S. Citizens and Reporting Companies

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The past week has seen two major announcements that have significant implications on the Corporate Transparency Act (CTA). First, on February 27, 2025, the Financial Crimes Enforcement Network (FinCEN) announced that it will not impose fines, penalties, or take any enforcement actions against companies for failing to file or update Beneficial Ownership Information (BOI) reports under the CTA by March 21, 2025. FinCEN also announced that it plans to issue an interim final rule by March 21, 2025, which would extend the BOI reporting deadlines under the CTA and would also solicit public comments on potential revisions to current BOI reporting requirements.

Just three days later, on March 2, 2025, the U.S. Department of Treasury (FinCEN is a bureau under the Department of Treasury) issued a press release entitled “Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies.” In the press release, the Department of Treasury announced that:

• The Department of Treasury will not enforce any penalties or fines for failure to file under the current existing March 21, 2025 deadline;
• The Department of Treasury will not enforce any penalties or fines against U.S. citizens, domestic reporting companies or their beneficial owners after a proposed rule change takes effect (discussed below); and
• The Department of Treasury will issue a proposed rule that will narrow the scope of the CTA to apply only to foreign reporting companies.

The Department of Treasury’s announcement makes clear that it intends to narrow the CTA’s focus solely to foreign reporting companies. Whether such an action is legal remains to be seen as the CTA has not been deemed unconstitutional by the U.S. Supreme Court, nor has Congress repealed the law. However, the Department of Treasury’s announcement that it is pausing enforcement should provide comfort for domestic reporting companies choosing to pause CTA compliance until the new interim and final rules have been issued.

As this saga continues to unfold, we will continue to monitor all judicial, legislative and executive actions related to the CTA and will provide additional updates as they become available. Of course, should you have any questions regarding your reporting obligations under the CTA, please do not hesitate to reach out to any of our team members.