On February 27, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced the immediate suspension of the current March 21, 2025 reporting deadline for the Corporate Transparency Act’s (“CTA”) Beneficial Ownership Information (“BOI”) reporting obligations. FinCEN further stated that no enforcement actions, including fines or penalties, will be imposed on companies for failure to comply with the March 21, 2025, deadline. FinCEN intends to issue an interim final rule no later than March 21, 2025, to establish new relevant due dates and rules for BOI reporting. FinCEN continues to emphasize the BOI reports’ contribution to U.S. national security intelligence, and it aims to prioritize enforcement of the reporting requirements for those entities that it deems to present the most significant risks to law enforcement and national security.
Expounding on the enforcement element, the Department of Treasury (“Treasury”) issued a press release on March 2, 2025, confirming that it will not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners, even after the proposed BOI reporting rule changes take effect. The Treasury further elaborated that it will be issuing a proposed rulemaking process that will narrow the scope of the requirement to foreign reporting companies only.
FinCEN’s alert and the Treasury’s announcement demonstrate their commitment to reduce the regulatory burden on businesses, as well as their mindfulness regarding the lack of clarity provided on the BOI reporting requirements over the past several months. These recent updates explicitly establish the government’s position that the national security risk – the driver of the CTA – rests squarely with foreign entities registered to do business in the U.S.
Background
The suspension of BOI reporting requirements for U.S. businesses follows the February 17, 2025 decision by the U.S. District Court for the Eastern District of Texas, which lifted its stay on the BOI reporting obligations in Smith v. U.S. Dep’t of the Treasury. As a result of this decision, FinCEN initially set a mandatory BOI reporting deadline of March 21, 2025, as detailed in our previous client alerts.
Public Commentary and Next Steps
Following the impending interim final rule, FinCEN plans to seek public comments as part of the notice of proposed rulemaking process to determine if further modifications to the BOI reporting obligations and deadlines should be considered, in addition to those expressed by the Treasury. FinCEN is expected to release the notice of proposed rulemaking later this year.
Leech Tishman is closely monitoring CTA developments and its enforcement by FinCEN and will update clients as the situation continues to evolve.
Alexander J. Gase is a Partner in Leech Tishman’s Corporate Practice Group and is based out of the firm’s Pittsburgh office. He can be reached at agase@leechtishman.com.
Elissa Steiner is an Associate in Leech Tishman’s Corporate Practice Group and is based out of the firm’s Pittsburgh office. She can be reached at esteiner@leechtishman.com.