FinCEN Removes Corporate Transparency Act Reporting Requirement for Domestic Companies and Beneficial Owners

On March 21, 2025, the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) submitted an interim final rule (IFR) exempting domestic companies and U.S. persons from reporting requirements under the Corporate Transparency Act (CTA) and extending the reporting deadline for foreign companies. The IFR went into effect on March 26, 2025, following its publication in the Federal Register.

What Is the CTA?

The CTA is a federal law that requires certain businesses to provide FinCEN with beneficial ownership information (BOI) relating to individuals who have significant ownership interests in or exercise substantial control over those businesses. This law was enacted to enhance transparency in business ownership, supporting the government's efforts to combat financial crimes and prevent money laundering.

Since going into effect on January 1, 2024, the CTA has been the subject of an array of legal challenges and legislative efforts to delay its reporting requirements or overturn it in its entirety.

Unpacking the FinCEN IFR

Domestic Companies No Longer Required To Report

FinCEN's IFR narrows the application of the CTA in several ways. First, and most impactfully, it modifies the definition of a "reporting company" to exclude domestic reporting companies. Under the IFR, the only companies subject to the CTA's reporting requirements are foreign entities that are registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office.

Prior to FinCEN's IFR, the CTA would have imposed reporting obligations on roughly 32 million companies, the vast majority of those being domestic entities. The number has now been reduced to an estimated 12,000 foreign entities.

U.S. Beneficial Owners of Foreign Companies No Longer Required for BOI Reporting

FinCEN's IFR also reduces the reporting burden on foreign entities that are still subject to the CTA by removing the requirement to report any beneficial owners who are U.S. citizens.

Deadlines Extended for Foreign Companies

For foreign entities that are still required to report, FinCEN's IFR extends the filing deadline for their BOI reports by 30 days following the IFR's publication (i.e., April 25, 2025).

What Happens Now?

FinCEN is accepting comments on the IFR for 60 days following its publication (i.e., until May 25, 2025) and intends to issue a final rule later this year. Subject to further developments, the IFR eliminates CTA reporting obligations for domestic entities and removes the requirement that foreign entities report U.S. beneficial owners.

Given that the CTA remains the subject of several legal challenges across the country and current legislation in United States Congress, current and (previously defined) reporting companies should continue to monitor for updates regarding the CTA and FinCEN's IFR.