The ongoing Corporate Transparency Act (CTA) rollercoaster ride has taken yet another dramatic turn. In a surprising announcement, the U.S. Department of the Treasury stated that it will not enforce any penalties or fines related to the CTA’s Beneficial Ownership Information (BOI) reporting requirements, both under current regulatory deadlines and after forthcoming rule changes take effect.
Even more significantly, Treasury has confirmed it will revise the CTA’s scope to apply only to foreign reporting companies, which would effectively exempt U.S. domestic businesses from compliance. This announcement marks the most significant shift in the CTA’s tumultuous history, reinforcing the impact of ongoing legal challenges, regulatory uncertainty, and shifting political priorities under the new administration.
The Corporate Transparency Act, enacted under the Anti-Money Laundering Act of 2020, was originally designed to combat financial crimes by requiring many U.S. businesses to disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). The law’s goal was to prevent money laundering, tax evasion, and illicit financial activities by increasing business transparency.
However, since its implementation on January 1, 2024, the CTA has faced a series of legal challenges and court rulings questioning its constitutionality, scope, and regulatory burden on small businesses. These challenges ultimately led to multiple nationwide injunctions, enforcement pauses, and deadline extensions.
In its official statement, Treasury explained that these changes are intended to support American taxpayers and small businesses, ensuring that regulations are appropriately tailored to advance the public interest.
Treasury Secretary Scott Bessent called the decision a “victory for common sense,” aligning with the administration’s agenda to reduce regulatory burdens on businesses.
“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.” – U.S. Treasury Secretary Scott Bessen
While the Treasury Department has framed this decision as a deregulatory move, the agency’s reference to the public interest standard raises important legal and regulatory considerations.
Although Treasury’s announcement significantly reduces the risk of penalties, it is not a complete repeal of the CTA reporting requirement—at least not yet.
The Treasury Department has confirmed that it will not enforce penalties or fines on:
However, non-enforcement does not mean the reporting requirement itself has been eliminated. The CTA remains in effect, and until Treasury’s rulemaking process is completed, businesses are still technically required to file BOI reports.
Treasury’s most significant policy shift is its commitment to revise the CTA’s scope so that only foreign reporting companies will be subject to BOI reporting. However, this change will require a formal rulemaking process, which likely includes:
Notably, under the CTA, the Secretary of the Treasury may issue regulations to exempt any entity or class of entities if reporting "would not serve the public interest" and "would not be highly useful" to national security or law enforcement efforts.
Treasury cannot implement this change unilaterally. Per the CTA, the Attorney General and the Secretary of Homeland Security must concur in the final rule before it takes effect.
This additional review process introduces further procedural hurdles, meaning the final implementation timeline remains uncertain.
The CTA’s legal and regulatory journey has been anything but predictable, and Treasury’s latest announcement represents its most dramatic shift yet.
With BOI reporting requirements for domestic businesses now effectively unenforced, and Treasury planning to limit the CTA’s scope to foreign reporting companies, the compliance burden for most U.S. companies has significantly decreased.
However, businesses should not assume that the CTA ride is over. Until the new rule is finalized, uncertainty remains, and future political shifts, agency interpretations, or legal challenges could still impact the final outcome.
For now, businesses should stay informed, monitor Treasury’s rulemaking process, and consult legal counsel before making any final compliance decisions. For further guidance on how these changes impact your business, please contact your Jones Foster attorney or email JFCTA@jonesfoster.com.
The information provided in this article does not, and is not intended to, constitute legal advice; it is for general informational purposes only. No reader of this article should act or refrain from acting on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction to ensure the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.
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