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Corporate Transparency Act Requirements: Clear as Mud!

Posted March 6, 2025 at 6:51 AM

Business & Tax, News & Events

In January of 2024 we wrote an article on the Corporate Transparency Act (CTA) focusing on what happens to personally identifiable information once disclosed through the FinCEN reporting process.  You can read that article here.

Recent Updates
A lot has happened with respect to the CTA since January of 2024; and in particular over the last few weeks:

  • On February 17, 2025, the court in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.) entered an order staying its January 7 preliminary injunction prohibiting enforcement of the CTA.  In connection with this ruling, FinCEN extended the BOI reporting deadline for most entities through March 21, 2025.
  • On February 27, 2025, in the wake of the ruling and reporting deadline referenced above, FinCEN made an announcement that, pending the issuance of an interim final rule with respect to the CTA, it “will 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 (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines.”
  • On March 2, 2025, the US Treasury Department made an announcement that “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.” 

So where does this leave us?  One thing is clear, the recent announcements of FinCEN and the US Treasury Department are not tantamount to law.  The CTA remains enforceable pursuant to the February 17, 2025 decision in the Smith case.  That said, the FinCEN and Treasury Department announcements indicate that the current administration will likely seek to limit the purview of the CTA by exempting from the reporting requirements “U.S. citizens and domestic reporting companies.”

It should also be noted that other litigation with respect to the CTA remains ongoing.  For example, in Small Bus. Ass’n of Mich. v. Yellen, 1:24-cv-00314 (W.D. Mich.), the court entered an order on March 3, 2025, ruling that the CTA violates the plaintiffs’ 4th Amendment rights prohibiting unreasonable searches and seizures. 

How MM&C Business Attorneys Can Help
How this will all play out over the coming weeks is unclear but there is certain to be further guidance prior to the current March 21 reporting deadline.  Stay tuned on our News & Events page  for further updates, and please reach out to Kevin D’Anna if you have any questions about reporting requirements in the meantime.

Kevin D’Anna is a Principal at Miller, Miller & Canby and a member of the firm’s Business & Tax and Real Estate (finance) practice groups. Kevin regularly advises financial institutions in connection with asset-based, real estate, and USDA and SBA guaranteed loan transactions.  In addition, he has become trusted outside counsel for local and regional businesses of varying size and industry, providing legal advice on matters ranging from business formation to disposition, and providing practical legal advice in connection with complex business transactions.

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