On March 21, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network announced it is issuing an interim final rule that removes the beneficial ownership information reporting requirements under the Corporate Transparency Act for U.S. companies and persons. FinCEN’s statement follows a Feb. 27 announcement that it was ceasing enforcement of the CTA while it crafted a new set of regulations ahead of the March 21 reporting deadline.

While the interim final rule is not permanent, the announcement clarifies any confusion on reporting requirements and whether companies will still need to file their BOI. In January, ABC joined more than 100 trade associations to request relief from the CTA.

While the new rule alleviates the need to file, this relief is only temporary. So long as the CTA statute remains in place, a future administration could rewrite the rules to be more expansive. For this reason, ABC strongly supports H.R. 425, the Repealing Big Brother Overreach Act, which would repeal the CTA and relieve American small business owners from these burdensome reporting requirements and criminal penalties.

For more information, read the Interim Final Rule: Questions and Answers and visit the BOI website. FinCEN is accepting written comments on this interim final rule until May 27, 2025.

ABC encourages members and small business owners to consult with counsel about BOI reporting.

Background

On Jan. 1, 2021, Congress enacted into law the CTA, which establishes a new framework for the reporting, maintenance and disclosure of beneficial ownership information in order to better enable critical national security, intelligence and law enforcement efforts to counter money laundering, the financing of terrorism and other illicit activity.

ABC, along with a coalition of small business organizations, submitted a letter to congressional leadership expressing concerns on the amendments incorporating the CTA into the 2021 National Defense Authorization Act, stating the enactment of the CTA would decrease privacy protections and slow the economic recovery of Main Street businesses.

ABC responded to Treasury’s FinCEN notice of proposed rulemaking seeking public input on how best to implement the reporting requirements of the CTA, as well as the CTA’s provisions regarding FinCEN’s maintenance and disclosure of reported information in comments.

ABC’s comments noted that the framework prescribed by the CTA will require millions of small businesses, including nearly every employer with 20 or fewer employees, to report to FinCEN certain personal information of their beneficial owners and update that information periodically throughout the life of the business.

ABC also argued that America’s small businesses—which make up most of ABC’s members—are typically not staffed or equipped to understand and comply with reporting obligations similar to those under the CTA. However, per the CTA, failure to comply can result in significant fines and imprisonment for these small business owners.