Client Alert: The Uncertainty Continues – Another Major Update to The Corporate Transparency Act

As reported in our Client Alert dated Feb. 20, 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued guidance on Feb. 19, 2025, stating that the requirement to file beneficial ownership interest reports (“BOIR”) under the Corporate Transparency Act (“CTA”) is once again in effect. This guidance impacted deadlines to file BOIRs as follows:

• Entities in existence as of Dec. 31, 2023, had until March 21, 2025, to file their BOIRs.
• Entities that were created or registered between Jan. 1, 2024, and Dec. 31, 2024, originally had 90 days from the date of creation or registration to file their BOIRs. They had until March 21, 2025, to file BOIRs.
• Reporting companies that were previously given a reporting deadline later than the March 21, 2025, deadline had to file their initial BOIR by that later deadline. For example, if an entity’s reporting deadline was in April 2025 because it qualified for certain disaster relief extensions, it was to follow the April deadline, not the March deadline.
• Entities that were created or registered on or after Jan. 1, 2025, had until the later of March 21, 2025, or 30 days after their creation or formation, to file their BOIRs.

The past tense is intentionally used with respect to the deadlines specified above because on Feb. 27, 2025, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on failure to file or update BOIRs by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. FinCEN stated that no later than March 21, 2025, FinCEN intends to issue an interim final rule extending BOIR deadlines. Recognizing the need to provide new guidance and clarity as quickly as possible, the rule must ensure that beneficial ownership interest information that is highly useful to important national security, intelligence, and law enforcement activities is reported.

Then, on March 2, 2025, the U.S. Treasury Department issued the following announcement:

“The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”

During the past several months, with respect to filing BOIRs, entities were vacillating between taking take a “wait and see approach” and incurring the risk of having to make a filing quickly. Other entities were more proactive and made a voluntary filing. Now, with FinCEN’s March 2, 2025 announcement, and presuming that the Treasury Department does not change course again,  domestic entities will not need to file BOIRs; only foreign entities will need to file BOIRs in accordance with a rule to be promulgated at some point by the Treasury Department.

Business attorneys at Norris McLaughlin, P.A., are equipped to help financial institutions to analyze their obligations under the CTA and the requirements regarding access to BOI for businesses and beneficial owners failing to report. You may contact John F. Lushis, Jr., at jlushis@norris-law.com.

About the Author- Biz Law

John F. Lushis, Jr., Member of the firm and Co-Chair of the Economic Development Law Practice, focuses on real estate, commercial transactions, and economic development law. He advises on leases, acquisitions, financings, and commercial agreements, representing businesses and non-profits like Lehigh University and Lehigh Valley Health Network.

John has extensive experience with tax-exempt financings, tax increment financing projects, and public-private partnerships (P3), including leading a groundbreaking P3 project in Pennsylvania that inspired statewide legislation. He also counsels on solar leases for green energy projects and provides environmental legal support to businesses.