Corporate Transparency Act Enforcement Suspended

What Happened?

On March 2, 2025, the U.S. Department of the Treasury announced it will not enforce penalties or fines for failing to file a beneficial ownership information report under the Corporate Transparency Act (CTA) by the upcoming deadline of March 21, 2025. Additionally, Treasury revealed plans to issue new rules that will narrow the CTA’s reporting requirements to apply only to non-U.S. citizens and foreign reporting companies. Once these new rules are implemented, penalties will not be imposed on U.S. citizens or domestic reporting companies but they may be imposed on non-U.S. citizens and foreign reporting companies.

What Does This Announcement Mean?

While the timeline for the issuance of new rules is uncertain, it is clear that Treasury intends not to enforce CTA reporting requirements against U.S. citizens and domestic reporting companies. However, foreign reporting companies and non-U.S. citizens will probably still be subject to penalties and fines for failing to file beneficial ownership information reports under the CTA after the new rules are issued. If the anticipated new rules use the same definitions as under the CTA, a “foreign reporting company” is any corporation, limited liability company, or other entity formed under foreign (non-U.S.) law and registered in any U.S. state to conduct business. Accordingly, foreign reporting companies and non-U.S. citizens should comply with FinCEN guidance issued on February 19 regarding filing deadlines.

How is Bernstein Shur Assisting Clients with CTA Compliance?

Our Business Law Practice Group has been closely tracking developments surrounding the CTA and is ready to assist with your compliance needs. If you have questions about whether you need to file a report or the implications of these changes, our team is available to help. Please contact your Bernstein Shur attorney or reach out to Bryce Morrison at bmorrison@bernsteinshur.com.