No Enforcement of CTA Penalties While FinCEN and Treasury Revamp Rules and Filing Deadlines

The saga of the Corporate Transparency Act (CTA) continues, as the Treasury Department announced on March 2, 2025, that it will not enforce the beneficial ownership information requirements against domestic companies or their owners. Instead, Treasury advised that only foreign companies will be subject to the CTA when enforcement is fully implemented. Additionally, FinCEN announced on February 27, 2025, that it would not be enforcing the March 21, 2025, filing deadline previously announced on February 18, 2025, and will instead announce new deadlines by that date.

Challenges to Implementing the CTA

The CTA has gone through several changes and challenges since parts of it first took effect on January 1, 2024. There have been multiple court challenges, several injunctions, and even a trip before the Supreme Court. The original regulations cast a wide net in its definition of a “reporting company,” by defining it as any company that filed documents with a secretary of state to do business. This included small, single member LLCs and even some sole proprietorships.

Multiple groups brought legal challenges to the CTA, which led to three injunctions against its enforcement. Two injunctions have since been “stayed,” meaning they have not gone into effect, while a third remains in place. This third injunction is not nationwide and only covers member companies in a small business trade association.  

Evolving Deadlines and Requirements 

The last nationwide injunction against the CTA was stayed on February 18, 2025. At that time, FinCEN advised that reporting companies formed before February 19, 2025 (including reporting companies formed before January 1, 2024), would have until March 21, 2025, to file their initial reports. Companies formed after February 19, 2025, would continue to have 30 days to file their initial report. That same alert advised that FinCEN would “assess its options to further modify deadlines.”

FinCEN has now advised that it will not issue fines or penalties or “take any other enforcement actions” against reporting companies that fail to file their beneficial ownership information reports by the current deadlines. It further advised that there will be a forthcoming interim final rule extending the due date that should be issued no later than March 21, 2025, as well as a notice of proposed rulemaking later this year intended to “minimize the burden on small businesses.” Treasury advised that the forthcoming rule changes will limit the application of the CTA to foreign companies only, and that it will not enforce the CTA against U.S. citizens or domestic reporting companies or their beneficial owners.

Reporting companies will now have to wait until March 21, 2025, to learn if they will continue to be subject to the reporting rules, and, if so, what the new filing deadlines will be.