Yesterday, the Treasury Department (Department) announced in a press release its intention that it will not enforce penalties or fines associated with the reporting requirements as to existing deadlines under the Corporate Transparency Act (CTA). The Department also stated its intention that it will not enforce penalties or fines against U.S. citizens, domestic reporting companies, or such companies’ beneficial owners after anticipated reporting rule changes take effect. The Department further announced that it intends to issue proposed rulemaking, which will narrow the scope of the reporting rule to only foreign companies.
The Department’s press release is consistent with the announcement, made only a few days ago, by the Financial Crimes Enforcement Network (FinCEN) of a new March 21, 2025, deadline for reporting under the CTA. https://foslaw.com/cta-reporting-requirements-back-on-deadline-march-21-2025/.
Continuing the on-again, off-again implementation of the CTA’s reporting requirements, on February 27, 2025, FinCEN announced that, while the March 21, 2025 deadline remains, FinCEN will impose no enforcement or penalties until a forthcoming interim reporting rule becomes effective. This move appears to be in line with the recent FinCEN guidance that, while litigation is pending and challenging the validity of the reporting requirements writ large, FinCEN will continue to accept voluntary submissions.
The interim rule, which will be issued on or before March 21, 2025, will extend and clarify the reporting requirements and solicit comments for the forthcoming interim rule, including on potential revisions to the reporting requirements altogether.
According to FinCEN, these actions are intended to reduce the regulatory burden on small businesses while still focusing on those entities that FinCEN contends pose the greatest law enforcement and national security risks.
As a practical matter, FinCEN’s statement and the Department’s press release mean that reporting companies will have to balance the very low current risk of noncompliance due to the lack of FinCEN enforcement and penalties and the Department’s statements regarding nonenforcement with the continuing existence of the March 21, 2025 deadline.
FOS will continue to monitor the CTA and reporting obligations. If you have any questions, contact your FOS attorney.
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