Important Update Regarding the Corporate Transparency Act

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The Corporate Transparency Act (CTA) previously required both foreign and domestic reporting companies to file Beneficial Ownership Information (BOI) reports or face penalties. However, some entities, such as banks, public accounting firms, publicly traded companies, and certain trusts, were exempt.

Due to ongoing litigation, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) announced on February 27, 2025, that by March 21, 2025, it will issue an interim final rule (IFR) regarding the CTA. Until then, FinCEN will not enforce BOI filing penalties.

Furthermore, on March 2, 2025, FinCEN clarified that even after the IFR takes effect, penalties will not be enforced against U.S. citizens, domestic companies, or their beneficial owners. Only foreign reporting companies will still be required to submit BOI reports. However, this is not yet an official rule.

Impact on Clients

Who Must Report BOI?

• Exempt from Reporting: U.S. citizens, domestic reporting companies, and companies already exempt under CTA.
• Must Report: Foreign reporting companies.
  

Recommendations for Clients

• Foreign Reporting Companies: These clients should either file their BOI reports by the deadline or wait for further guidance, as non-compliance may still lead to penalties.
• Non-Citizens with Domestic Reporting Companies: Since FinCEN’s statement is not yet a formal rule, these clients should stay informed, as reporting requirements may still apply to them.
• U.S. Citizens and Domestic Reporting Companies: These clients are not required to file BOI reports and will not face penalties under the announced enforcement policy. However, they should monitor updates once the IFR is officially released.
  

FinCEN’s statements indicate a shift in enforcement, but until the IFR is published, final reporting requirements remain unclear. Clients should stay updated for further developments.

If you have questions about FinCEN, the CTA, or what this means for you, please don’t hesitate to reach out to our team!