New developments in beneficial ownership information reporting

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.

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."

Feb. 17, 2025: The U.S. District Court for the Eastern District of Texas in Samantha Smith and Robert Means v. U.S. Department of the Treasury granted the DOJ's request for a stay of the court's nationwide injunction, reinstating the CTA's BOI reporting requirement.

Jan. 24, 2025: FinCEN provided an update, confirming the nationwide injunction in Smith et al remains in place and filing is voluntary stating, “Reporting companies are not subject to liability if they fail to file this information while the Smith order remains in place.”

Jan. 23, 2025: The Supreme Court issued a stay of the nationwide injunction banning the CTA’s enforcement in the Texas Top Cop case. This was not a ruling on the case but rather the injunction that was in place while the case is appealed in the Fifth Circuit court. If Texas Top Cop had been the only nationwide stay in place, this would allow FinCEN to resume enforcement; however, the nationwide order blocking enforcement in the Smith et al case remains in place.

Jan. 7, 2025: Another Texas federal judge also found the CTA to be likely unconstitutional and blocked its enforcement in Samantha Smith and Robert Means v. U.S. Department of the Treasury.

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.