Corporate Transparency Act on hold once again

The Corporate Transparency Act, which has been on again and off again for months is now off again. 

Just days after reinstating the Corporate Transparency Act’s beneficial ownership information (BOI) reporting deadline to March 21, FinCEN announced it will issue an interim final rule by the same March date that further extends BOI reporting deadlines, citing the need to provide new guidance and clarity.  

With this decision, fines and penalties for noncompliance in filing a report will not be issued. 

Elise Pillitteri, a shareholder at Fitzpatrick Lentz and Bubba, said that this means BOI reporting is once again voluntary. 

The firm is advising that companies that have not yet filed should delay filing until FinCEN issues a subsequent statement outlining proposed rule changes and revised deadlines. 

Additionally, companies that have already filed a BOI report should not submit any updated or corrected reports until the interim final rule outlines deadlines and requirements. 

A forthcoming interim final rule will be issued no later than March 21, 2025. 

FinCEN has committed to providing its interim final rule by that date.  

FinCEN said that it also intends to solicit public comment on potential revisions to existing BOI reporting requirements and it will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize the burden on small businesses.  

However, FinCEN said that it will continue to prioritize Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.  

Pillitteri said the constitutionality of the CTA will be taken up by the 5th Circuit on March 25. There are numerous legal cases challenging the CTA. 

The report is intended to identify individuals who are associated with the reporting company. That means individuals with at least a 25% ownership stake, or who are leading decision makers within the company. 

The CTA was established to prevent individuals with ill intent from hiding or benefitting from the ownership of U.S. entities to bolster illegal operations such as the drug trade or terrorism, which according to the U.S. government is a pervasive problem.