Treasury Will Not Impose BOI Reporting Penalties Against U.S. Citizens and Domestic Reporting Companies
The Treasury Department announced in a news release on March 2, 2025, that they will not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners concerning the Corporate Transparency Act.
According to the U.S. Department of the Treasury’s March 2, 2025, announcement, they will not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners for not complying with the Corporate Transparency Act. Furthermore, the Treasury Department intends to issue a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only.
The Corporate Transparency Act’s beneficial ownership reporting requirements will be the subject to proposed rule changes, creating uncertainty for tax professionals. The current final rule defines a “foreign reporting company” as an entity (including corporations and limited liability companies) formed under the law of a foreign country and registered to do business in the United States by filing a document with a secretary of state or similar office.
The press release does not clarify whether the proposed rule will retain the current definition for companies exempt from reporting. The definition is located in 31 CFR 1010.380(c)(1)(ii), though the statutory text itself does not explicitly define the term. This lack of clarity has potential implications for foreign businesses operating in the US and their beneficial ownership reporting requirements. Tax professionals must remain vigilant and informed as the Treasury provides further guidance.
This release expands on the announcement made on February 27, 2025, by FinCEN that it would not issue fines, penalties, or enforcement actions against any companies for failing to file or update BOI reports by the existing deadlines. FinCEN’s announcement indicated that this would be the case until an interim final rule extending BOI reporting deadlines became effective and the new due dates in that rule had passed. FinCEN also stated its intention to solicit public comment on potential revisions to BOI reporting requirements to minimize the burden on small businesses.
Prepared with assistance from Notebook LM.