Last week, we reported that the Financial Crimes Enforcement Network (FinCEN) reinstated the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements, with a new deadline for most companies to file their CTA BOI reports of March 21, 2025.
However, on February 27, 2025, FinCEN issued a new press release announcing that it will not issue any fines or penalties, or take any other enforcement actions against companies based on any failure to file or update their BOI reports by the March 21, 2025 deadline. Per FinCEN’s press release, 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. Essentially, this means that the CTA’s BOI reporting requirements are once again voluntary until more information is provided by FinCEN.
What Comes Next?
FinCEN announced that no later than March 21, 2025, it intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity to reporting companies as quickly as possible. The announcement indicates that these new deadlines will ensure that beneficial ownership information that is highly useful to important national security, intelligence, and law enforcement activities is reported. This language suggests that the new deadlines proposed by FinCEN may differ depending on the risks posed by certain entities.
Following FinCEN’s prior notice indicating that it intends to initiate a process to further review and revise the CTA’s BOI reporting regulations, FinCEN now specified that it intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will then consider those comments as part of a notice of proposed rulemaking anticipated to be issued later in 2025 to balance the burden on small businesses while supporting the national security, intelligence, and law enforcement activities the CTA is intended to strengthen. FinCEN will also use the public comments to determine what, if any, modifications to the reporting deadlines should be considered.
This change by FinCEN comes on the heels of a unanimous House of Representatives vote on February 10, 2025, to approve extending the CTA deadlines for existing reporting companies to January 1, 2026 (H.R. 736). A companion bill (S.505) has been introduced in the Senate and, while it may take some time based on the current Senate workload, we expect the Senate bill will obtain considerable support (as it did in the House of Representatives) and will ultimately become law. Should this happen, existing entities formed prior to January 1, 2024, will have until January 1, 2026, to file their initial reports and FinCEN will need to develop revised deadlines only for: (i) the initial reports for those entities formed after January 1, 2024, and (ii) for the updating requirements of existing entities that may have already filed their BOI reports as well as for those entities formed after January 1, 2024. FinCEN’s interim rule may very well consider this legislation circulating on Capitol Hill and reflect this outcome.
Key Takeaways
In the short term, entities who have not yet reported their beneficial ownership information may choose to voluntarily file BOI reports, or can choose to hold off on filings given that there will not be any adverse enforcement actions taken by FinCEN. In the longer term, as reported in our prior publication on the reinstated March 21 deadline, lengthy litigation and continued activity in the political branches are expected and may further affect the CTA’s reporting requirements. Further, companies subject to reporting should continue seeking advice and gathering information to ensure they are prepared to address any new guidance to be issued in FinCEN’s expected interim final rule.
For more details regarding the CTA’s reporting requirements, see our prior publications regarding the CTA as a whole, a mid-year status update, New York’s corporate transparency law, and our Compliance Collective CLE webinar, among other publications discussing the application of specific CTA exemptions or ambiguities.
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