Treasury Department to Suspend All Enforcement of Corporate Transparency Act against U.S. Citizens and Domestic Reporting Companies

03.11.2025

On March 2, 2025, the U.S. Treasury Department (Treasury) issued a statement providing that the Treasury will not enforce any penalties or fines associated with the Corporate Transparency Act’s (CTA) Beneficial Ownership Information (BOI) reporting requirements under the current deadlines. Additionally, Treasury will also not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners even after FinCEN’s upcoming rule changes take effect.

In other words, Treasury (via FinCEN) will be enforcing the CTA’s BOI requirements against foreign reporting companies and non-U.S. citizen owners only. Treasury also plans to narrow the scope of the BOI rules, so that the rules only apply to foreign reporting companies.

FinCEN, the government agency tasked with administrating and enforcing the CTA and the CTA’s BOI reporting requirements, is a bureau of the U.S. Treasury Department.

It is yet to be seen whether the forthcoming rule changes will alter or clarify the relevant definitions. That said, the current BOI reporting rules include the following:

The term “domestic reporting company” means any entity that is: (i) a corporation; (ii) a limited liability company; or (iii) created by the filing of a document with a secretary of state or any similar office under the law of a State or Native American tribe.
The term “foreign reporting company” means any entity that is: (i) a corporation, limited liability company, or other entity; (ii) formed under the law of a foreign country; and (iii) registered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a State or Native American tribe.

The official Treasury statement also noted that “Treasury takes 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.” Additionally, the U.S. Secretary of the Treasury said, about the announcement, that “[t]his is a victory for common sense”.

Background

Since the CTA’s enactment in 2021, CTA has been subject to a wide range of legal challenges across the U.S. in various courts. U.S. citizen owners of domestic businesses who have been following the CTA saga will likely feel a sense of relief at this latest turn of events. That said, time will tell whether this is really the end of the CTA’s story.

In late December and early January, the Fifth Circuit Court of Appeal lifted, then quickly reinstated a nationwide injunction on CTA enforcement in the Texas Top Cop Shop case. Then, in late January, the U.S. Supreme Court lifted the injunction against the CTA issued in the Texas Top Cop Shop case. However, the U.S. Supreme Court did not rule on a similar nationwide injunction issued by the federal district court in Smith v. United States Department of the Treasury. This left businesses in a state of limbo, requiring constant monitoring of multiple legal cases to make sense of potential CTA BOI filing enforcements.

For additional background information on the CTA, please see our previous updates:

Corporate Transparency Act – Nationwide Injunction Reinstated by Fifth Circuit

Fifth Circuit Lifts the Nationwide Injunction on the Corporate Transparency Act BOI Reporting Requirements – FinCEN Extends Filing Deadline

Unveiling the Corporate Transparency Act: New Business Reporting Requirements