Indefinite Suspension of CTA Filing Obligations (For Now)

On March 2, 2025 the U.S. Treasury Department laid waste to about a million law firm postings about the Corporate Transparency Act, announcing that Treasury now intends to propose fundamental changes to the CTA Rule and that all enforcement of the CTA will be suspended in the meantime:

“The Treasury Department is announcing today [March 2] that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. 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.”

What does this mean?

1. Treasury says it will be issuing a proposed rule which (a) exempts all domestic companies from BOI reporting requirements and (b) limits the reach of the CTA just to “foreign reporting companies only.”
2. Whether Treasury has authority to make such sweeping changes to the Act through rulemaking is debatable. Exempting domestic companies from the Act might require Congress to amend the CTA.
3. Treasury says, “it [will] not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines.” We read this to mean that, AT LEAST FOR NOW, Treasury has suspended enforcement of all CTA reporting requirements, even as to reporting companies (domestic or foreign) that already missed prior reporting deadlines and perhaps even as to persons who knowingly caused an entity to file inaccurate reports.
4. A suspension of enforcement of reporting requirements does not necessarily mean a suspension of all CTA-related obligations. For example:
   1. The Act strictly limits access to FinCEN’s BOI database. Unauthorized use of confidential information in that database is a violation that can result in significant criminal or civil penalties.
   2. Failure to protect personal information could violate federal or state privacy laws.
   3. Submitting a knowingly false BOI report might constitute wire fraud.
5. The suspension is likely to remain in place for an extended period. On February 27, FinCEN announced its intention to amend the existing CTA Rule and further extend filing deadlines through an “interim final rule” to be published by March 21. Like Treasury’s announcement three days later, FinCEN’s February 27 notice also foreshadowed further future rulemaking: “FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.”

Bottom line: The CTA filing regime appears headed for fundamental change.