Guide: The Latest on the Corporate Transparency Act

The Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements have been suspended for U.S. citizens and reporting companies.

What happened: The Treasury Department announced that it will not enforce any penalties or fines associated with the BOI reporting rule for U.S. reporting companies. The Treasury Department will be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.

Now, after numerous delays and legal challenges, U.S. small businesses will not be fined or penalized if they do not file their paperwork by the extended deadline previously announced by Treasury’s Financial Crimes Enforcement Network (FinCEN) of March 21, 2025.

The latest in the courts: A federal court in Michigan ruled on March 3 that the Corporate Transparency Act violates the Fourth Amendment to the U.S. Constitution. The court issued a limited injunction blocking the law’s enforcement against challenger plaintiffs and their business members, including the Small Business Association of Michigan and the Chaldean American Chamber of Commerce.

What is the CTA?

The CTA was enacted by Congress on January 1, 2021, as part of the National Defense Authorization Act.  The CTA included significant reforms to anti-money laundering laws and is intended to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud.  

Under the act, small businesses in the United States were required to file beneficial ownership information reports (BOIR) with the Department of the Treasury by January 1. This deadline was on hold due to federal court rulings.

Failure to submit the paperwork would have put small business owners at risk of criminal penalties, imprisonment, and fines up to $10,000.