If you’ve been following along with my updates on the Corporate Transparency Act (CTA) — from my November 2023 post about “getting a year-long extension” to my December 2024 update on the “Appeals Court reinstating, then suspending” the requirements — I’ve got some significant news to share. After months of legal back-and-forth and uncertainty, we finally have clarity — and it’s exactly the outcome many of us predicted.

The Big Announcement

On March 2, 2025, the Treasury Department announced that it will not enforce any penalties or fines against U.S. citizens or domestic reporting companies related to beneficial ownership information (BOI) reporting requirements. This applies both to the current regulatory deadlines and to any requirements after forthcoming rule changes take effect.

Even more significantly, Treasury will be issuing a proposed rulemaking that will narrow the scope of the CTA to apply only to foreign reporting companies.

What This Means For You

If you own a U.S. business, this announcement effectively removes the BOI reporting burden from your plate:

1. If you haven’t filed a BOI report yet:  Don’t bother. Save yourself the time and hassle of collecting personal information and submitting it to FinCEN
2. If you’ve already filed:  No need to renew or update your filing next year.
3. If you’ve filed and want your information removed:  I’m actively monitoring for information about how to potentially redact unnecessary filings and will update you when that process becomes available.

How We Got Here: A Brief Timeline

For those who haven’t been following this saga closely, here’s how we arrived at this point:

• November 2023:  I advised business owners to form their entities before December 31, 2023, to take advantage of the extended filing deadline.
• December 3, 2024:  A Texas federal court suspended the CTA filing deadline.
• December 23, 2024:  The 5th Circuit Court of Appeals reinstated the CTA, extending the deadline to January 13, 2025.
• December 26, 2024:  The 5th Circuit reversed itself, suspending the deadline again.
• March 2, 2025:  Treasury announced it will not enforce penalties against U.S. citizens and domestic companies, and will narrow the scope to foreign companies only.

Why This Matters

This outcome aligns with what I’ve been telling many of you from the beginning. The CTA, while well-intentioned in its aim to combat money laundering and terrorist financing, imposed a disproportionate burden on small U.S. businesses — the backbone of our economy.

Treasury Secretary Scott Bessent acknowledged this in the announcement, calling it “a victory for common sense” and part of an agenda to “unleash American prosperity by reining in burdensome regulations, in particular for small businesses.”

What’s Next?

While this is excellent news for domestic business owners, we should stay alert to future developments:

1. Formal rule changes:  Treasury still needs to issue the formal rulemaking narrowing the CTA’s scope. While the non-enforcement announcement provides immediate relief, we’ll want to follow the actual rule changes.
2. Redaction process  : For those who have already filed, I’ll be looking for information about how to potentially have your information removed from the FinCEN database.
3. Future legislation:  Congress could always revisit this issue with new legislation. I’ll continue to monitor any developments that might affect your business.

My Take

I’ve been skeptical about the implementation of the CTA from the beginning, and this outcome confirms what many of us in the legal community suspected: this rule was always going to be more bark than bite for small American businesses.

For my clients who have been concerned about privacy implications or the administrative burden of compliance, this represents a welcome resolution. It’s also a reminder that sometimes the best approach is to wait and see how regulations evolve before rushing to comply with potentially overreaching requirements.

As always, my goal is to help you navigate legal complexities so you can focus on what you do best — building and running your business. If you have questions about how this development affects your specific situation, please don’t hesitate to reach out.

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