The U.S. Department of Treasury has stated that it will not enforce any penalties or fines in connection with enforcement of the existing regulatory deadlines for the Beneficial Ownership Information Report (“BOIR”) requirement under the Corporate Transparency Act (“CTA”). The Treasury Department has further noted that it will issue a proposed rule to narrow the scope of the BOIR requirements to foreign reporting companies only. As a result, while technically the applicable deadlines remain in effect for the BOIR (March 21, 2025 for most reporting companies formed prior to 2024) as this announcement was only a press release, except for non-U.S. Citizens and foreign reporting companies, the Treasury Department has stated it will take no action to enforce the BOIR requirements and will narrow the scope of the BOIR requirements so that they no longer apply.
A lot has happened in the world of CTA and BOIR over the past 2-1/2 months. Where eLawLines last left matters with its December 30, 2024 article, the U.S. Fifth Circuit Court of Appeals vacated an earlier decision staying an injunction which suspended the reporting requirements of the CTA. In other words, the CTA and BOIR was off, at least for the moment.
Subsequently, on January 23, 2025, the U.S. Supreme Court granted the government’s motion to stay the nationwide injunction issued by a federal judge in the Texas Top Cop Shop, Inc. v. Bondi, which made the CTA and BOIR go back into effect. A separate Texas federal court’s nationwide injunction enjoining the enforcement of CTA was also stayed in the case of Smith v. U.S. Department of the Treasury on February 18, 2025. As a result of those two decisions, the CTA and the BOIR reporting requirement were back on.
The Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) determined that sufficient time was needed to comply with the BOIR requirements and thus FinCEN generally granted an additional 30 days from February 18, 2025, for most companies to comply. This made March 21, 2025 the new BOIR reporting requirement for most reporting companies formed prior to 2024.
Then, on March 2, 2025 the Treasury Department issued a press release announcing that not only would it not enforce any penalties or fines associated with the BOIR rule under existing regulatory deadlines, but that it would not enforce any penalties or fines associated with the BOIR against U.S. citizens, domestic reporting companies, or their beneficial owners. The Treasury Department also stated that it will be issuing proposed rulemaking that will narrow the scope of the BOIR rule to only foreign reporting companies.
While the BOIR rule is not entirely history, the Treasury Department has indicated that it will not take any action against U.S. citizens and domestic reporting companies regarding the BOIR requirement and will pursue the proper rulemaking to codify this announcement. (Do keep track by checking in on our website from time-to-time.) However, if you, a beneficial owner, or a reporting company are not U.S. citizens or a domestic entity, the CTA and its BOIR rule clearly remains in force.
For those who may still have questions regarding the Corporate Transparency Act and the Beneficial Ownership Information Report requirements, or other corporate compliance matters, please contact the corporate attorneys at Jenkins Kling, P. C., including:
- David Weiss at 314/561-5078 or at [email protected]
- Mary Grimes at 314/561-5086 or at [email protected]
- Jennifer Beasley at 314/721-2525 or [email protected]