The Rapidly Shifting State of Corporate Transparency Act Enforcement: A Timeline

The Rapidly Shifting State of Corporate Transparency Act Enforcement: A Timeline

Rapid developments have shaken the Corporate Transparency Act (CTA) landscape. The latest announcements continue to shift the enforcement and scope of beneficial ownership information (BOI) reporting requirements, leaving risk, compliance, and legal professionals once again with new considerations.

On March 2, 2025, the US Department of the Treasury issued a press release stating that it will not impose penalties or fines related to BOI reporting under the current regulatory deadlines. Additionally, when forthcoming rule changes take effect, the Treasury will not enforce penalties against US citizens, domestic reporting companies, or their beneficial owners. The agency also announced plans to propose a rule that would narrow BOI reporting requirements to apply primarily to certain foreign entities registered to do business in the United States.

Law firm Holland & Knight published the following chronology of the most recent Corporate Transparency Act events and pronouncements on March 4, 2025.

• Feb. 17, 2025: The last nationwide injunction imposed by a court that prohibited enforcement of the CTA beneficial ownership information (BOI) reporting rules was stayed (lifted), thereby reinstating the BOI reporting rule.

• Feb. 18, 2025: In response to the lifting of the nationwide injunction, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced that BOI reporting requirements were reinstated with a March 21, 2025, filing deadline for most companies. FinCEN also announced there would be a further modification in filing deadlines prior to March 21, 2025, and would initiate a review process to evaluate BOI reporting rules to reduce burden for lower-risk entities.

• Feb. 27, 2025: FinCEN announced that 1) It will not issue any fines or penalties or take any other enforcement action against any companies based on any failure to file or update BOI reports by the current deadlines, 2) No fines or penalties will be issued and no enforcement actions will be taken until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed, 3) No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, and 4) FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. 

• March 2, 2025: The Treasury Department, the organization of which FinCEN is a bureau, issued a press release stating the following:
  • There will be no enforcement of any penalties or fines associated with BOI reporting under the existing regulatory deadlines of March 21, 2025, or later deadlines as identified in the FinCEN announcement of Feb. 18, 2025.
  • FinCEN will not enforce any penalties or fines against US citizens or domestic reporting companies or their beneficial owners until after the forthcoming rule changes take effect.
  • The Treasury Department will issue proposed rulemaking to narrow the scope of the BOI reporting rule so that only certain foreign companies registered to do business in the US would be required to submit BOI information.
  • President Donald Trump and Treasury Secretary Scott Bessent both issued statements expressing support for these efforts.

• March 3, 2025: In a litigation, the Corporate Transparency Act was declared unconstitutional by the US District Court for the Western District of Michigan. The court found that BOI reporting under the CTA violates the Fourth Amendment’s prohibition on unreasonable search and seizure. In addition, the court ruled that the plaintiffs in the case would not be subject to the CTA.

• March 3, 2025: In a stipulated motion (whereby both parties to the litigation agree) to withdraw a motion for a preliminary injunction in the US District Court for the District of Utah, the pleading stated that the Treasury Department had announced that it will not enforce the CTA against US citizens and is suspending fines and deadlines to file.

According to further commentary from Holland & Knight, the recent FinCEN announcements and the Treasury Department’s press release indicate a shift in the administration’s approach to the Corporate Transparency Act, though they do not carry the force of law. While FinCEN has yet to formally begin its rulemaking process, the scope of  BOI reporting remains uncertain. The agency may still require some US companies—particularly those controlled by non-US citizens—to comply with reporting obligations. Initial estimates suggested that nearly 71,000 foreign entities operating in the US could be subject to BOI reporting, with approximately 10,890 new foreign entities added annually. However, these numbers contrast sharply with the prior estimate of over 32 million domestic entities classified as reporting companies under the CTA.

Meanwhile, multiple constitutional challenges to the Corporate Transparency Act are making their way through the courts, including appeals of rulings in Alabama, Texas, and Michigan that have found aspects of the law unconstitutional. The Treasury’s evolving stance on enforcement may influence the government’s legal defense of the CTA, particularly in light of ongoing litigation. Additionally, some commentators argue that the administration’s failure to fully implement the law as written could itself be subject to legal challenge. Legislative efforts to either extend reporting deadlines or repeal the CTA altogether are also underway in Congress. 

Further guidance from FinCEN and the Treasury Department is expected by March 21, 2025.