Much has been happening concerning the Corporate Transparency Act (“CTA”) lately.
First, on February 18, 2025, the preliminary injunctions against the CTA were lifted by the courts pending appeal. However, the multiple lawsuits continue forward seeking to invalidate the law. The US Supreme Court likely will be the ultimate decider on the fate of the CTA.
Following the decision lift the injunctions, FinCEN extended the filing deadline (for most reporting companies) to March 21, 2025, and announced that it will not issue any penalties or pursue enforcement action against reporting companies for the mere failure to meet the current filing deadlines until it issues interim final regulations on the CTA.
Then, on March 2, 2025, the Secretary of the Treasury proclaimed that, in addition to not enforcing the CTA or imposing penalties for a mere failure to meet the new March 21, 2025 reporting deadline, the Treasury Department (of which FinCEN is a subdivision) will not enforce the CTA or impose penalties thereafter against U.S. citizens or domestic reporting companies or their beneficial owners. Even taken at face value this proclamation leaves at least two open questions: what happens if a US entity has owners that are not U.S. citizens, and what happens if a foreign entity has U.S. citizens who are owners?
Then, on March 10, 2025, two US Senators requested that the Treasury Secretary report to Congress with the legal support for the Treasury’s proclamation. Some legal commentators too are questioning the legal authority of Treasury to refuse to enforce the CTA.
The takeaway from all this is that what’s going on with the CTA is a big mess right now. A conservative approach for entities subject to the CTA would be to file a BOI report with FinCEN, if possible before March 21, 2025. But, for those who do not wish to do that, and who decide not to file a report at this time, keeping a watchful eye on the CTA, and what happens related to it in the courts, Congress and the Treasury Department, is very important so that no applicable deadlines are missed at a time when the government is enforcing the CTA.