After more than a year of on-again, off-again requirements for small business owners, the U.S. Treasury announced March 2 that it will not enforce any fines or penalties against companies that do not report their beneficial ownership information as required by the Corporate Transparency Act.
At the beginning of 2024, the Treasury’s Financial Crimes Enforcement Network (FinCEN) began requiring most businesses with fewer than 20 employees to report their Beneficial Ownership Information (BOI). That requirement was challenged in court and ruled unconstitutional, but the ruling was limited in scope in application.
Later in the year, a federal appeals court placed an injunction on the requirement as a legal challenge continued to play out. That injunction was lifted last month, putting the BOI reporting requirement back in effect. FinCEN at that time put a March 21 reporting deadline on the requirement.
On March 2, however, the Treasury Department said it would not enforce any fines or penalties associated with BOI reporting under the existing regulatory deadlines, nor would it "enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners” following forthcoming rule changes, suggesting foreign entities would still face penalties for not filing.
The department said it will be issuing a new proposed rulemaking with hopes to narrow the scope of the rule to require that only foreign companies report their BOI.
“This is a victory for common sense,” said Treasury Secretary Scott Bessent.
President Donald Trump called the BOI reporting requirements "outrageous and invasive," adding that it has been "an absolute disaster" for small businesses.
Congress had also been eyeing a delay of the reporting requirement until 2026 with its Protect Small Businesses from Excessive Paperwork Act of 2025, which passed the House in February with a unanimous 408-0 vote. The Senate has yet to take action on the legislation.
[Related: Congress eyes delay of Treasury's owner-reporting requirement]
