In the latest development in the ongoing Corporate Transparency Act debate, the Treasury Department’s Financial Crimes Enforcement Network announced on Feb. 27 that it will cease enforcement of the CTA while it crafts a new set of regulations that will ultimately narrow the scope of the reporting regime. The release comes as the CTA’s reporting requirements were scheduled to take effect once again beginning March 21.

On Jan. 23, the U.S. Supreme Court stayed a district court’s nationwide injunction against the Corporate Transparency Act’s Beneficial Ownership Information reporting requirements, following the U.S. Department of Justice’s request. The nationwide injunction had blocked enforcement of the CTA’s BOI reporting requirements. However, according to the Financial Crimes Enforcement Network’s website, a separate national injunction issued earlier this month by a different federal judge still remains in place, and thus reporting companies are not currently required to file BOI with the FinCen despite the Supreme Court’s action.

Effective Jan. 1, 2024, the Corporate Transparency Act requires certain entities, including many small businesses, to report information about the individuals who ultimately own or control them (also known as their “beneficial owners”) to the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.

On March 1, 2024, a federal judge ruled that the Corporate Transparency Act is unconstitutional, marking a milestone in the 16-month ongoing legal battle led by the National Small Business Association and supported by the S-Corporation Associates of America and the members of the Main Street Employers Coalition, including ABC.