On February 27, 2025, FinCEN published guidance related to the Corporate Transparency Act (the “CTA”) taking the position that it would not “issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information reports pursuant to the Corporate Transparency Act by the current deadlines [of March 21, 2025].” In that same release, FinCEN further stated that no later than March 21, 2025, it would release an interim final rule clarifying the various reporting requirements included in the CTA, and that it further intends to solicit additional public comments on this subject. On March 2, 2025, the U.S. Treasury Department issued a press release stating that it expects the final rule will narrow the scope of the CTA to apply to foreign reporting companies only.
The release comes in response to a February 18, 2025 decision by the U.S. District Court for the Eastern District of Texas reinstating the reporting requirements and FinCEN’s resulting updated filing deadline of March 21, 2025. Pursuant to this guidance, it appears that the requirements of the CTA technically remain in effect and those entities covered by the CTA are obligated to file as described in the act, however FinCEN will not be enforcing any penalties for non-compliance. The future of the CTA is uncertain, and it is therefore unclear what, if any, repercussions there may be for entities that fail to fulfil their reporting obligations. Hopefully, FinCEN’s new rule due out later this month will provide further clarity and finally put the last several months of CTA related whiplash to bed.
