Monthly Archives: March 2025

On March 3, 2025 we posted BOI Was Back But Treasury Now Says That It's Off Again - Is This Any Way to Run a Country? where we discussed that the Department declared that it would suspend enforcement of the CTA and the associated Beneficial Ownership Information (BOI) reporting requirements for domestic companies and U.S. citizens. This shift represents a major departure from the original intent of the law, which was designed to combat illicit financial activities through increased transparency of both domestic and foreign entities.

Key Developments

1. Enforcement Pause: The Treasury Department will not enforce CTA reporting requirements against U.S. citizens, domestic entities, and their beneficial owners.
2. Scope Reduction: Treasury intends to issue a proposed rule limiting the CTA's application to foreign reporting companies only.
3. Deadline Extension: FinCEN previously announced a revision of beneficial ownership information reporting deadlines, with a new deadline to be set in an upcoming interim final rule.

Support for the Change:

• Treasury Secretary Scott Bessent views this as a "victory for common sense" aligning with efforts to reduce regulatory burdens on small businesses.
• The Cato Institute's Brent Skorup suggests Treasury may rely on statutory discretion to exempt most small businesses and nonprofits.

Criticism and Concerns:

• Transparency advocates argue this change could make the U.S. a haven for illicit financial activity and may violate global anti-money laundering standards.
  • See our post US Is World's Best Tax Haven & Location For Hiding Income. 
• Some legal experts, like Chye-Ching Huang of the Tax Law Center, contend that Treasury lacks the authority to not enforce a law enacted by Congress.
• Critics, including Senator Ron Wyden, view this as potentially benefiting entities seeking to hide illicit activities.
  • See our post US Is World's Best Tax Haven & Location For Hiding Income. 

Ongoing Uncertainties

1. Legal Status: The CTA remains in effect, despite Treasury's non-enforcement stance, creating potential risks for non-compliant entities.
2. Information Clarity: There are concerns about the consistency and accessibility of information regarding these changes, with announcements coming from different sources within Treasury.
3. Future Developments: The situation remains fluid, with potential for further legal challenges, congressional action, or additional regulatory changes.

This shift in CTA enforcement represents a significant policy change with wide-ranging implications for corporate transparency and anti-money laundering efforts in the United States.

Need Help Filing Your BOI Report?

 

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

 

 

 

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Read more at: Tax Times blog

On February 20, 2025 we posted BOI is Back With a New March 21, 2025 Deadline! where we discussed that with the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect.

Now on March 2, 2025, the U.S. Treasury Department announced a significant change regarding the enforcement of the Corporate Transparency Act (CTA). 

The Department Declared That It Would Suspend
Enforcement Of The CTA And The Associated
Beneficial Ownership Information (BOI) Reporting Requirements For Domestic Companies And U.S. Citizens.

Key points of this announcement include:

• Suspension of penalties: The Treasury will not issue fines, penalties, or take enforcement actions against companies that fail to file or update BOI reports under the current deadlines.

• Narrowing scope: The Treasury is preparing a proposed rulemaking to limit the CTA's application to foreign reporting companies only.

• Upcoming rule changes: By March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) intends to issue an interim final rule extending BOI reporting deadlines.

• Public comment: FinCEN plans to solicit public input on potential revisions to existing BOI reporting requirements.

This decision effectively pauses the CTA's implementation for domestic entities, which was originally designed to combat money laundering, terrorist financing, and other illicit activities. The move has been welcomed by some as reducing regulatory burdens on businesses, particularly small enterprises. 

“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent.  “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

However, critics argue that this change could potentially weaken efforts to combat financial crimes and maintain corporate transparency.

It's important to note that while the enforcement is suspended, the Treasury Department is working on new regulations that will likely bring significant changes to the existing reporting regime.  

Need Help Filing Your BOI Report?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

Read more at: Tax Times blog