Treasury Department Suspends Enforcement of Corporate Transparency Act for U.S. Businesses

If you have been following our coverage of the Corporate Transparency Act (CTA), I am sorry—you probably have an aching neck from all the starts and stops. While most of the prior twists and turns have been the result of court decisions, the latest news comes straight from the U.S. Department of the Treasury.

On March 2, 2025, the U.S. Department of the Treasury announced a major shift in the enforcement of the Corporate Transparency Act (CTA). The department stated that it will no longer enforce penalties or fines related to the beneficial ownership information (BOI) reporting requirements against U.S. citizens, domestic reporting companies, or their beneficial owners after the current deadline of March 21, 2025. Instead, Treasury plans to issue an interim final rulemaking that would narrow the scope of the CTA to apply only to foreign reporting companies.

What This Means for U.S. Businesses

This announcement marks a significant regulatory rollback for domestic companies, particularly small businesses that had been preparing for compliance with the CTA’s stringent reporting requirements. Prior to this decision, companies meeting the definition of a “reporting company” under the CTA were required to disclose detailed information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), with noncompliance subject to substantial penalties.

With the Treasury’s new stance, U.S. businesses that have not yet filed their BOI reports will likely no longer be required to do so. For those that have already filed, it remains to be seen how the Treasury and FinCEN will handle previously submitted information in light of this regulatory shift.

Reasoning Behind the Policy Change

Treasury Secretary Scott Bessent framed this decision as a victory for small businesses, stating, “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 move aligns with broader deregulatory efforts aimed at reducing administrative burdens on businesses and enhancing economic growth. Critics of the CTA had long argued that the compliance costs disproportionately impacted small businesses with limited resources, while larger corporations often had sophisticated legal teams to navigate the rules more easily.

Key Takeaways and Next Steps

For our business clients, this development raises several important considerations:

Suspension of Enforcement – The immediate takeaway is that there is no longer a compliance obligation for U.S. businesses, at least for the foreseeable future.

Future Rulemaking – The Treasury Department’s planned rulemaking process will clarify the extent of these changes, including whether prior filings will be retained or rescinded.

Foreign Companies Still Affected – While U.S. businesses are exempt under this policy shift, foreign reporting companies will still be subject to BOI reporting requirements.

Future Changes – Treasury has announced its intent to issue new regulations before March 21, 2025 deadline. Businesses and legal professionals should stay informed about upcoming rulemaking efforts to ensure compliance with any revised requirements.

For business owners unsure of how this policy shift affects their operations, consulting with legal counsel remains the best course of action. As developments unfold, we will continue to provide updates on the future of beneficial ownership reporting and what it means for U.S. businesses.