BREAKING – Treasury Department Suspends Enforcement of Corporate Transparency Act

MARCH 2 – Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies

Here’s how the announcement from the U.S. Treasury Department could impact you –

Major Change: No More BOI Reporting for U.S. Businesses

The Treasury Department has announced that it will not enforce any penalties or fines for failing to file Beneficial Ownership Information (BOI) reports under the Corporate Transparency Act (CTA)—not just under the current deadlines, but even after new rule changes take effect.

More importantly, the Treasury is shifting the rule entirely away from U.S.-based businesses. Instead, the BOI reporting requirement will be narrowed to apply only to foreign-owned reporting companies.

This means that small and mid-sized U.S. businesses will no longer need to file BOI reports, effectively removing what many saw as a bureaucratic headache and compliance burden.

The Legal Battle Over the CTA

This decision follows a growing legal fight over the CTA’s constitutionality. In January 2024, a federal judge in Alabama ruled that the law exceeded Congress’ authority, calling it unconstitutional. That ruling applied only to the plaintiffs in that case (the National Small Business Association and its members), but it signaled a broader challenge to the law’s future.

While the federal government initially planned to continue enforcing the CTA for everyone else, pressure mounted as more lawsuits were filed and as business groups pushed back against what they saw as an unfair and intrusive regulation. The March 2 announcement shows that the Treasury Department is now stepping back, likely in response to political and legal pressure.

What Small Business Owners Can Expect Next

• No Need to File BOI Reports: If your business was previously required to report its beneficial ownership to FinCEN, you no longer need to worry about filing. Treasury will not penalize businesses that don’t comply.
• Upcoming Rule Change: Treasury will formally change the regulation to apply only to foreign-owned entities, meaning this decision is not just a temporary pause but a long-term shift in policy.
• Potential Further Legal Battles: While this announcement is a major rollback of the CTA, there could still be court challenges or new attempts by Congress to restructure how beneficial ownership reporting works in the future.

For now, this is a win for small business owners who were facing a complex and costly compliance burden. If you were preparing to file a BOI report, you can hold off and wait for the new rules to take effect.