BOI Update: Another Update on the Corporate Transparency Act

On February 27, 2025, the Financial Crimes Enforcement Network announced that they will not issue any fines or penalties or take any other enforcement actions against companies based on their failure to file beneficial ownership information reports pursuant to the Corporate Transparency Act based on the March 21, 2025 deadline. They further announced that they intend to issue an interim final rule no later than March 21, which is expected to extend the deadline once again.  

A few days later, on March 2, 2025, the Treasury Department announced that it would not enforce any fines or penalties against US citizens or reporting companies or their beneficial owners after the rule change. They announced they will also be proposing a scope change that will narrow reporting requirement to only foreign reporting companies.  

Here is an updated timeline of what has happened:

• December 3, 2024: A federal judge in the Eastern District of Texas issued a nationwide preliminary injunction, halting the enforcement of the CTA's beneficial ownership reporting requirements, citing potential constitutional concerns.  

• December 23, 2024: The Fifth Circuit Court of Appeals lifted this injunction, reinstating the CTA's reporting obligations.  

• December 26, 2024: A different panel of the Fifth Circuit reinstated the nationwide injunction, once again pausing the CTA's enforcement.  

• January 7, 2025: A judge of the United States District Court for the Eastern District of Texas heard a second case on the constitutionality of the CTA and issued a separate nationwide preliminary injunction.

• January 23, 2025: The U.S. Supreme Court stayed one injunction, but did not address the other, which led to the Financial Crimes Enforcement Network (FinCEN) to state that compliance with the CTA's reporting requirements remains voluntary at this time.  

• February 17, 2025: A federal judge in Texas lifted the remaining injunction that had halted the enforcement of the CTA, effectively reinstating the CTA's requirements.

• February 27, 2025: FinCEN stated that they will not issue fines/penalties or take enforcement actions against companies based on failure to comply with the March 21 deadline. They also intend to issue an interim final rule no later than March 21.

• March 2, 2025: The Treasury Department announced that it will not enforce any fines/penalties against US citizens or domestic companies, even after the rule change takes place. They are also proposing that only foreign companies be required to file beneficial ownership reports.  

We are continuing to monitor the situation closely. We recommend business owners to consult legal counsel to ensure compliance with any forthcoming requirements.