Article | Tax alert
New developments in beneficial ownership information reporting
March 27, 2025
In recent weeks, there have been several substantial developments relating to the beneficial ownership information (BOI) reporting requirements as outlined in the Corporate Transparency Act (CTA). Affected taxpayers can reference this page for the latest information on the status of BOI requirements.
Current status of BOI reporting requirements: On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that limits the application of the Corporate Transparency Act (CTA)’s Beneficial Ownership Information (BOI) reporting requirements to foreign entities and foreign nationals. The CTA was part of the Anti-Money Laundering Act of 2020.
Relevant developments
2025
March 21, 2025: As indicated above, FinCEN’s interim final rule limits BOI reporting requirements to foreign entities and foreign nationals. Per the FinCEN website, “[a]ll entities created in the United States — including those previously known as ‘domestic reporting companies’ — and their beneficial owners are now exempt from the requirement to report beneficial ownership information (BOI) to FinCEN.” An accompanying press release outlines the following deadlines for foreign entities required to file:
- Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date.
- Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
March 2, 2025: Treasury announced it would no longer enforce the CTA against U.S. citizens and domestic reporting companies, including no longer requiring BOI reports. Treasury’s statement went on to say that it would issue a proposed rule that would limit BOI reporting requirements to “foreign reporting companies only.”
Feb. 27, 2025: FinCEN announced that it would “not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update” BOI reports under the CTA by March 21, 2025. “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.”
Feb. 19, 2025: FinCEN provided and update, confirming, "[b]eneficial ownership reporting requirements are back in effect, with a new deadline of March 21, 2025, from most companies. FinCEN will assess its options for further modifying deadlines."
2024
Dec. 26, 2024: A Fifth Circuit Court panel has vacated the previous stay of the CTA in the Texas Top Cop case. This reinstates the nationwide injunction while the merits panel considers the appeal. The government has appealed the stay to the Supreme Court.
Dec. 23, 2024: A Fifth Circuit Court motions panel granted the government’s motion for a stay in the Texas Top Cop case while an appeal is pending. This reinstated the requirement to file. On the same day FinCEN issued an alert [1] extending the Jan. 1, 2025, filing deadline to Jan. 13, 2025.
Dec. 3, 2024: A Texas district court found, in Texas Top Cop Shop Inc. v. Garland, the CTA was most likely unconstitutional and issued a nationwide injunction, prohibiting enforcement of FinCEN’s Jan. 1, 2025, deadline. The government has filed an appeal to the Fifth Circuit Court.
March 1, 2024: An Alabama district court, in National Small Business Association, et al. United v. Yellen, that the CTA was unconstitutional, preventing the government from applying the CTA to the plaintiffs in the case (there was no nationwide injunction). The government has appealed to the Eleventh Circuit Court.
Jan. 1, 2024: The CTA went into effect with BOI reports for previously existing companies due by Jan. 1, 2025, entities created between Jan. 1 and Dec. 31, 2024, due within 90 days of formation, and entities created after Jan. 1, 2025, due within 30 days of formation.
Background
The Corporate Transparency Act (CTA) was passed in 2021 and became effective beginning on Jan. 1, 2024. The CTA requires certain legal entities (such as corporations, limited liability companies and limited partnerships) in the U.S. to begin reporting identifying information about the individuals who own or control the entity. This is part of the federal government’s goal to strengthen its efforts involving money laundering, terrorism financing and other financial crimes. For additional background on the CTA and BOI reporting requirements, please read The Corporate Transparency Act: What you need to know now.
Baker Tilly and the CTA
As previously noted, Baker Tilly, in addition to other accounting firms, has determined assisting with the reporting required by the CTA constitutes the practice of law. As such, we strongly advise you to reach out to your legal counsel as soon as possible given the potentially arduous cost of compliance to discuss the possible impact of this latest development on your filing requirements and for any assistance needed.
[1] Updates to Beneficial Ownership Information Reporting Deadlines – Beneficial Ownership Information Reporting Requirements Now in Effect, with Deadline Extensions, Dec. 23, 2024, Financial Crimes Enforcement Network
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.