NEED MORE COWBELL: FinCEN Not Satisfied with Current Deadlines and Requirements under the Corporate Transparency Act
On February 27, 2025, FinCEN issued a press release announcing future changes but giving no guidance about the scope of those changes:
“No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.”
And:
“No fines or penalties will be issued, and no enforcement actions will be taken, until [that] interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.”
Agency rulemaking typically involves publication of a proposed rule, and then a period for public comment, and then ultimately (or not) a final rule with a stated effective date. An “interim final rule” is a departure from normal process. An “interim final rule” generally does solicit public comment but goes into effect immediately (more or less), even before the public comment period.
Based on what FinCEN has said, we draw the following conclusions (albeit subject to change):
- There will be some extension of the previously-announced March 21 filing deadline but (a) we don’t yet know if this will be an across-the-board extension or will extend only to certain types of filings and (b) we don’t yet know how long the extension (or, perhaps, a set of different extensions) will be.
COMMENT: It seems likely that there will be a brief extension that applies across-the-board for any initial BOI filings that otherwise were due January 1, 2025. If so, the brief extension might or might not extend to update requirements and might or might not extend to entities formed in 2025. If past practice is a guide, “brief” would mean 21 to 30 days after publication of the interim final rule.
- There will be some significant changes in the existing CTA Rule, likely expanding the classes of entities that are exempt from having to file BOI reports but also making other changes.
COMMENT: On February 18 FinCEN had stated, “Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period [i.e. through March 21] FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.” In now committing to publish an interim final rule by March 21, FinCEN appears to be accelerating its timetable for significant changes.
Stay tuned.
