As we noted in our February 20, 2025, client alert, unless the Financial Crimes Enforcement Network ("FinCEN") or Congress decided to take action by March 21, 2025, the beneficial ownership information ("BOI") reporting requirements under the Corporate Transparency Act (the "CTA") would generally go back into effect on that date.
In what has become a Groundhog Day-esque saga, as we have relived the on-again, off-again nature of the CTA and its BOI reporting requirements over the last several months, on February 27, 2025, FinCEN announced that it has now decided to take action to halt all enforcement of the CTA. In particular, as first previewed in its February 18, 2025, announcement, FinCEN has now confirmed that:
- FinCEN will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update BOI reports pursuant to the CTA by the current deadlines.
- No later than March 21, 2025, FinCEN intends to issue an interim final rule further extending the BOI reporting deadlines. No fines or penalties will be issued, or other enforcement actions taken, with respect to noncompliance with the CTA prior to the expiration of these new deadlines.
- FinCEN intends to propose new rules later this year to minimize the CTA’s burden on small businesses; ensure that BOI collected under the CTA is "highly useful to important national security, intelligence, and law enforcement activities"; and include potential further modifications to the CTA’s reporting deadlines.
In light of FinCEN’s February 27, 2025, announcement, reporting companies (as defined in the CTA) should now be able to safely pause their compliance efforts at least until FinCEN issues its interim final rule extending the BOI reporting deadlines. Given the continued twists and turns with respect to the CTA and its BOI reporting requirements, reporting companies should continue to monitor further developments regarding the CTA so that they can fully and timely comply with its requirements, when and to the extent they become applicable.
