The Bumpy Partial Demise of the Corporate Transparency Act

By David H. Freedman and Jordan M. Small

As we reported yesterday, on February 27, 2025, FinCEN (a bureau of the U.S. Department of Treasury) paused the March 21, 2025 reporting deadline under the Corporate Transparency Act (CTA) until an interim final rule is issued no later than March 21, 2025, extending the Beneficial Ownership Information Report deadlines (beyond March 21, 2025).  

Three days later, however, on March 2, 2025, the U.S. Department of Treasury issued a press release (below) which severely crushes the future viability of the CTA as it relates to U.S. citizens and domestic reporting companies as it suspends enforcement of the CTA against them. The press release also announces that when the U.S. Department of the Treasury issues a proposed rulemaking regarding the CTA in the future, the rulemaking “will narrow the scope of the rule to foreign reporting companies only”.

Note that the CTA remains the law (it just won’t be enforced) and could be revived by the next administration unless repealed. This opens the door for Congress and the President to work in this direction without having to rely on the unknown outcome of pending litigation.

Maddin Hauser attorneys continue to monitor these developments and provide updates as they emerge. Follow our CTA blog and other social media for the latest news.

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

March 2, 2025

The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.

“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent.  “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

###