CTA Reporting Obligations Will Not Be Enforced Against Domestic Reporting Companies

On February 27, 2025, the Financial Crimes Enforcement Network (FinCEN) issued a press release stating that it intends to extend the filing deadlines for beneficial ownership information reports under the Corporate Transparency Act (CTA) by means of rulemaking on or before March 21, 2025 and that companies will not be fined or subjected to any enforcement action if they do not file or update their reports by the existing deadlines established by FinCEN.

In a follow up press release issued on March 2, 2025, the United States Department of the Treasury announced that, in addition to not enforcing the Corporate Transparency Act (CTA) reporting obligations prior to FinCEN’s upcoming rulemaking, it will also not enforce those reporting obligations against domestic reporting companies or their beneficial owners after that upcoming rulemaking. It also stated that the upcoming rulemaking will narrow the scope of the reporting obligations to foreign reporting companies only.

Foreign reporting companies are defined in FinCEN’s regulations as any entity formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.

Since it is likely that few foreign companies directly register to do business in the United States because of the associated adverse tax consequences, there will be few remaining companies subject to the CTA’s reporting obligations if the upcoming rulemaking is adopted as described in the Department of Treasury’s press release.

These administrative actions do not amend the CTA; they merely contemplate an administrative action by rulemaking to not enforce its provisions against domestic reporting companies. As such, these actions may be subject to challenge through litigation.

For now, we would recommend that domestic reporting companies suspend their efforts to comply with the Corporate Transparency Act pending the adoption of the upcoming rulemaking, but preserve the information they have gathered.