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The Death of the Corporate Transparency Act

Posted on March 3, 2025 by Doug Cornelius
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Maybe?

On Sunday the Treasury Department announced that there would be no future enforcement of the Corporate Transparency Act against US companies.

The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.

“This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

Unfortunately, this press release merely shows a profound misunderstanding of the law or a disregard of the law. The language of the Corporate Transparency Act is straightforward in the requirements that it applies to US entities. I don’t see how a rulemaking can change that. 

In fact, the CTA doesn’t really apply to foreign entities:

(A) IN GENERAL.—Each applicant to form a corporation or limited liability company under the laws of a State or Indian Tribe shall file a report with FinCEN containing a list of the beneficial owners of the corporation or limited liability company

The reporting requirements are triggered only by US entities.

Sources:

  • Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies
  • Text of the Corporate Transparency Act

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