BOI Was Back But Treasury Now Says That It's Off Again - Is This Any Way to Run a Country?

On February 20, 2025 we posted BOI is Back With a New March 21, 2025 Deadline! where we discussed that with the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect.

Now on March 2, 2025, the U.S. Treasury Department announced a significant change regarding the enforcement of the Corporate Transparency Act (CTA). 

The Department Declared That It Would Suspend
Enforcement Of The CTA And The Associated
Beneficial Ownership Information (BOI) Reporting Requirements For Domestic Companies And U.S. Citizens.

Key points of this announcement include:

• Suspension of penalties: The Treasury will not issue fines, penalties, or take enforcement actions against companies that fail to file or update BOI reports under the current deadlines.
  
  
• Narrowing scope: The Treasury is preparing a proposed rulemaking to limit the CTA's application to foreign reporting companies only.
  
  
• Upcoming rule changes: By March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) intends to issue an interim final rule extending BOI reporting deadlines.
  
  
• Public comment: FinCEN plans to solicit public input on potential revisions to existing BOI reporting requirements.

This decision effectively pauses the CTA's implementation for domestic entities, which was originally designed to combat money laundering, terrorist financing, and other illicit activities. The move has been welcomed by some as reducing regulatory burdens on businesses, particularly small enterprises. 

“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent.  “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

However, critics argue that this change could potentially weaken efforts to combat financial crimes and maintain corporate transparency.

It's important to note that while the enforcement is suspended, the Treasury Department is working on new regulations that will likely bring significant changes to the existing reporting regime.  

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