Treasury Exempts Domestic Companies and U.S. Persons from CTA Reporting Requirements

Beneficial Ownership Information Reporting Requirement No Longer Relevant for Most

On March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an Interim Final Rule that limits enforcement of the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements to foreign reporting companies. This rule exempts domestic reporting companies and U.S. persons from compliance.

Some domestic companies had already submitted their BOI reports prior to this announcement. For those that did, FinCEN has stated that the submitted data will be deleted once a new final rule is issued later in 2025. In testimony before Congress, FinCEN Director Andrea Gacki confirmed the agency’s intention to destroy previously submitted data from exempted entities.

Key Takeaways:

• Despite renewed efforts in 2025 to repeal the CTA, it remains in effect.
• Supporters of the CTA have questioned the Treasury Department’s legal authority to exempt domestic small businesses and U.S. persons from reporting requirements.
• If the CTA is not repealed, a future administration that supports the law could reinstate enforcement against domestic reporting companies and U.S. persons.
• FinCEN has indicated that a new final rule will be released before the end of 2025.

Context: The Corporate Transparency Act (CTA)

The Corporate Transparency Act (CTA) was enacted as part of the National Defense Authorization Act for Fiscal Year 2021. Its primary purpose is to combat money laundering, terrorist financing, and other illicit financial activities by requiring certain entities to disclose their beneficial owners to FinCEN.

Under the CTA, reporting companies—generally corporations, limited liability companies, and similar entities—must submit beneficial ownership information, including names, dates of birth, addresses, and identification numbers of individuals who own or control the company.

The law aims to create a centralized database of beneficial ownership information accessible to law enforcement and certain government agencies, thereby increasing transparency and reducing the misuse of anonymous shell companies.

Compliance requirements initially applied to both domestic and foreign reporting companies, with strict deadlines and penalties for non-compliance. However, the recent Interim Final Rule significantly narrows enforcement to foreign entities, raising questions about the future scope and implementation of the CTA.

Businesses should monitor developments closely, as future administrations or legislative actions could reinstate broader compliance obligations. Companies previously exempted may need to prepare for potential reporting requirements if the CTA remains in effect or is strengthened in the future.

How We Can Help:

A business attorney, like Margaret, who understands the law and the risks that businesses face, internally and externally, can provide businesses with a professional, objective, top-level view of corporate formalities. We can help business owners to ensure they are observing the formalities necessary to protect themselves against personal liability for the business’s obligations and debts and maintain essential records needed for the business’s operations—whether legally required or recommended best practices. Call us today to set up an appointment, (480) 525-6244.