Corporate Transparency Act – FinCEN Temporarily Pauses Enforcement
On February 27, 2025, the Financial Crimes Enforcement Network (FinCEN) announced that it will not impose fines, penalties, or other enforcement actions against companies that fail to meet the recently re-instated deadlines for filing or updating Beneficial Ownership Information (BOI) reports under the Corporate Transparency Act (CTA).[1] This pause in enforcement will remain in effect until a forthcoming interim final rule establishes the new deadlines.
This announcement follows the recent decision by Judge Jeremy Kernodle of the Eastern District of Texas to stay the preliminary injunction which had initially blocked enforcement of the CTA.[2]
FinCEN plans to issue this interim final rule by March 21, 2025, which will extend reporting deadlines and provide additional guidance. Additionally, the agency intends to again seek public input on potential revisions to existing BOI reporting requirements. A formal notice of proposed rulemaking is expected later this year, with a stated goal of aiming to reduce regulatory burdens on small businesses while ensuring BOI remains valuable for national security and law enforcement efforts.
This decision comes in the wake of the House of Representatives’ unanimous vote to approve the Protect Small Businesses from Excessive Paperwork Act of 2025 (Act).[3] This legislation extended certain BOI deadlines from January 1, 2025 to January 1, 2026. While the Act now heads to the Senate for approval, it is unclear at this time when a vote could take place.
Businesses should stay tuned for upcoming regulatory updates and prepare for potential adjustments to their BOI reporting obligations.
[1] https://fincen.gov/news/news-releases/fincen-not-issuing-fines-or-penalties-connection-beneficial-ownership
[2] See Smith v. U.S. Department of the Treasury, 6:24-cv-00336 (E.D. Tex.)
[3] https://www.congress.gov/bill/119th-congress/house-bill/736
