In our previous blog post, we alerted you to the reinstated Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act, with a deadline of March 21, 2025, for most U.S. businesses to file their reports. However, a significant update from the U.S. Department of the Treasury this week has shifted the landscape once again, offering relief to millions of domestic small businesses and their owners. Here’s what you need to know about this latest development.
Treasury Halts Enforcement of BOI Penalties for U.S. Companies
On March 2, 2025, the Treasury Department announced that it will no longer enforce penalties or fines against U.S. citizens or domestic reporting companies for failing to comply with the BOI reporting requirements—neither under the current March 21 deadline nor after forthcoming rule changes take effect. This decision marks a dramatic pivot from the prior enforcement stance, which had threatened civil penalties of up to $591 per day and criminal fines of up to $10,000 for non-compliance.
The Treasury’s move comes as a welcome reprieve for small business owners who have faced confusion and regulatory whiplash due to multiple court challenges and shifting deadlines surrounding the CTA.
A Shift in Focus: BOI Rules to Apply Only to Foreign Companies
In addition to suspending enforcement for domestic entities, the Treasury revealed plans to issue proposed rulemaking that will narrow the scope of the BOI reporting requirements. Going forward, the obligation to file BOI reports will apply solely to foreign reporting companies—those entities registered to do business in the U.S. but formed under the laws of another country. This change aims to refocus the CTA’s anti-money laundering efforts on entities perceived as posing greater risks to national security and law enforcement, while alleviating the compliance burden on U.S.-based businesses.
While the details of the proposed rule are still forthcoming, this shift suggests that most domestic small businesses—previously estimated at over 32 million entities subject to the reporting rules—may no longer need to file BOI reports at all once the new regulation is finalized.
What Should You Do Now?
If you’ve already begun preparing your BOI report in anticipation of the March 21 deadline, you can likely pause those efforts—at least for now. The Treasury’s announcement effectively suspends the immediate pressure to file, and the forthcoming rule changes could eliminate the requirement entirely for U.S.-formed companies. However, here are a few key steps to consider:
1. Stay Informed: The Treasury has promised to issue a proposed rulemaking to formalize these changes, likely followed by a public comment period. Until the new rule is finalized, the situation remains fluid. We’ll keep you updated as more details emerge.
2. Foreign Entities, Take Note: If your business is a foreign reporting company operating in the U.S., you may still be subject to BOI reporting once the new rules are in place. Keep an eye on future guidance from FinCEN to understand your obligations.
3. Hold Off on Filing (For Now): While the CTA technically remains in effect, the lack of enforcement for domestic companies means there’s no penalty for waiting. If you’ve already filed voluntarily, no action is needed unless your ownership information changes.
Looking Ahead
This latest development reflects a broader push to streamline regulations and reduce administrative burdens on American businesses—a priority echoed by President Donald Trump, who praised the Treasury’s decision as a win for small business owners nationwide. However, it’s worth noting that some anti-corruption advocates have raised concerns, arguing that suspending BOI enforcement for domestic companies could weaken efforts to combat illicit finance and potentially impact national security.
For now, the March 21, 2025, deadline is no longer a pressing concern for most U.S. businesses. O’Neill Law is closely monitoring these changes and will provide further updates as the Treasury clarifies its next steps. If you have questions about how this affects your business or need assistance navigating the evolving CTA landscape, don’t hesitate to reach out to us.
Stay tuned for more insights, and let us help you keep your business compliant with confidence.