Skip to Content
  1. Home

Read the U.S. Treasury Department’s Press Release

Two weeks after FinCEN received the green light from the courts to proceed with enforcement of the Corporate Transparency Act, the U.S. Treasury Department has put the car in reverse.

On March 2nd, the Treasury Department announced that it will issue proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only and not enforce BOI (Beneficial Ownership Information) reporting on U.S. citizens and domestic reporting companies.

“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.”

Following this announcement from the Treasury Department, we expect a follow-up statement from FinCEN and additional rules to be promulgated. However, as the language of the press release indicates, the regulatory burden will be lifted shortly on more than 30 million U.S. businesses.

The Treasury Department’s press release comes days after FinCEN announced on February 27th that it would not enforce any fines associated with BOI reporting under the existing regulatory deadlines.

How We Got Here: Treasury Department Looks to End CTA’s Revolving Door

The CTA was signed into federal law in 2021 as part of the National Defense Authorization Act that requires individuals with an ownership interest in a LLC to disclose personal data with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The CTA was enacted by Congress as an expansion of the anti-money laundering laws, intended to prevent terrorist financing, corruption, tax fraud, and other illicit activity. FinCEN originally announced that failure to comply would result in up to two (2) years of jail time and a $10,000 fine per violation. 

The CTA went into effect on Jan. 1, 2024, but courts have gone back and forth on the constitutionality of the act. Here are several court decisions that took place in 2024:

The Smith case was the only other nationwide injunction in place according to the court system, which would have allowed FinCEN to proceed with CTA enforcement.

However, the March 2nd press release reverses course with language saying that the CTA will apply to foreign companies only. We will monitor the action by the Treasury Department and FinCEN when they release that information.

About Our Authors

Sean Buckley is a corporate services attorney in the Adams and Reese Houston office. Sean advises clients on a wide array of corporate matters, including the purchase and sale of equity and assets, and in a diverse array of industries, including real estate transactions, entity selection and formation, corporate governance, and franchise opportunity matters.

Brian Smithweck is a corporate services attorney in the Adams and Reese Mobile office. Brian practices in the areas of corporate, partnership and limited liability company planning, estate planning, probate, trusts and estates, M&A, tax planning and tax controversies. He represents businesses, individuals and families. He has a Master of Laws in Taxation.

Additional Adams and Reese CTA Client Alerts:

Related Knowledge