Corporate Transparency Act Reporting Suspended
In summary
- The Financial Crimes Enforcement Network (FinCEN) will not impose fines and penalties for failure to comply with current beneficial ownership information (BOI) reporting deadlines.
- FinCEN will seek public comments about potential revisions to existing BOI reporting regulations ahead of finalizing revised rules.
Sign up to receive the latest tax insights as well as tax regulatory and administrative updates.
On Feb. 27, FinCEN announced that it will not issue fines or penalties or take any other enforcement action for not meeting current deadlines for BOI reporting under the Corporate Transparency Act (CTA). The announcement stated that FinCEN intends to issue interim regulations by March 21, 2025, extending reporting deadlines, and that BOI reporting will not be required until the interim rules are finalized and the new rules are effective. Additionally, the announcement stated that FinCEN will be soliciting public comments regarding potential revisions to the existing BOI reporting regulations.
On March 2, the U.S. Department of the Treasury issued an announcement supplementing the FinCEN Feb. 27 announcement stating that fines and penalties will not be imposed on U.S. citizens or domestic companies and their beneficial owners even after revised rules take effect. Furthermore, the Treasury announcement provides more information about the content of future rules, stating that proposed rulemaking will be issued “that will narrow the scope of the rule to foreign reporting companies only.”
Crowe observation
The latest announcements from FinCEN and Treasury paired with FinCEN’s earlier delays of the reporting deadline and court challenges to BOI reporting and the CTA rules have created significant uncertainty.
The latest announcements suspending enforcement of BOI reporting should provide comfort to individuals and entities that have not yet filed or updated BOI reports. However, the Treasury announcement is unclear about how precisely the scope of the CTA rules will be narrowed and when reporting will be required for those subject to the revised rules. Therefore, uncertainty will continue until further guidance is issued.
Looking ahead
The CTA was enacted with bipartisan support. Litigation regarding the CTA and BOI reporting is likely to continue even after the latest Treasury and FinCEN announcements. Many observers are advocating a wait-and-see approach as things develop. Individuals and entities should consult their legal counsel if they have questions about how to proceed.
Contact us
Our experienced tax professionals can help you tackle your most pressing tax challenges. Contact the Crowe tax team today.
Proposed regulations clarify the rules limiting the deduction for compensation of certain highly paid employees of publicly traded companies.
Proposed regulations on tax-free reorganizations and spinoffs would add significant compliance and reporting burden for taxpayers.
Proposed regulations clarify the rules limiting the deduction for compensation of certain highly paid employees of publicly traded companies.
Proposed regulations on tax-free reorganizations and spinoffs would add significant compliance and reporting burden for taxpayers.