In February 2025 and the previous December, Samuels Yoelin Kantor LLP posted blog articles relating to the Corporate Transparency Act (CTA), which requires certain companies to file beneficial ownership information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). FinCEN is the federal agency charged with enforcing the CTA.
In a confusing series of judicial and administrative actions, while FinCEN is not presently enjoined by the courts from enforcing the CTA, pending further administrative actions. However, in a press release issued by the Treasury Department on March 2, 2025, the Treasury Department announced that it was suspending enforcement against U.S. citizens or domestic reporting companies.
Here is a short timeline of the recent federal litigation involving the CTA:
- December 3, 2024: In McHenry v. Texas Top Cop Shop, a federal district court issued an injunction stopping the federal government from enforcing the CTA on constitutional grounds.
- December 23, 2024: The Fifth Circuit Court of Appeals halts the December 3rd Texas Top Cop Shop
- December 26, 2024: The Fifth Circuit reverses itself and reinstates the Texas Top Cop Shop
- January 7, 2025: In Smith v. U.S. Department of the Treasury, another federal district court issued a separate injunction stopping the federal government from enforcing the CTA on constitutional grounds.
- January 23, 2025: The U.S. Supreme Court stays the injunction in the Texas Top Cop Shop case, pending further proceedings in the Fifth Circuit Court of Appeals.
- February 19, 2025: The federal district court in the Smith case lifted its own injunction. With this action, the Smith court opened the door for the federal government to resume the enforcement of the BOI filing requirements under the CTA.
In the March 2, 2025 press release, the Treasury Department stated:
“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.”
So, what is the bottom line? Based on the Treasury Department’s press release, U.S. citizens and domestic reporting companies will not be subject to penalties or other enforcement actions for failure to file BOI reports. Considering the personal information disclosure required by BOI reporting, along with the cost of compliance on businesses and their owners, SYK does not recommend that BOI reports be filed at this time. We will follow further developments and post additional blog articles as appropriate. If a company has non-US ownership, it does appear that there may be some BOI reporting that will be required in the future.
Finally, in a separate series of developments, Congress is trying to delay the CTA for a year (to January 1, 2026). A bill to that effect passed the House on February 10, 2025, by a vote of 408-0. A companion bill has been introduced in the Senate, but no further action has occurred in the Senate as of this writing.
– Michael D. Walker
