CORPORATE TRANSPARENCY ACT UPDATE: A Sudden Change of Heart? FinCEN opts not to enforce CTA

By Kayla M. Kuri

Kayla M. Kuri

(Mar. 4, 2025) In what feels like a dramatic plot twist worthy of the most boring legal thriller of all time, the Financial Crimes Enforcement Network (“FinCEN“) has made a stunning announcement: it will not be enforcing beneficial ownership information (“BOI“) reporting requirements under the Corporate Transparency Act (“CTA“). That’s right—no fines, no penalties, no ominous enforcement actions lurking in the background. For now, at least, U.S. companies can breathe a collective sigh of relief.

The writing was on the wall. On February 18, 2025, following the court decision in Smith et al. v. United States Department of the Treasury et al. that stayed the preliminary injunction against enforcement of the CTA, FinCEN issued additional guidance which extended the BOI reporting deadline to March 21, 2025. In that statement, FinCEN hinted at potential reductions in the scope of the law and further extensions to the BOI reporting deadline. Then, in a follow-up announcement on February 27, FinCEN made it official: they won’t be pursuing non-compliant entities. Following that, the Treasury Department confirmed on March 2 that the anticipated revisions to the CTA will likely narrow its application to foreign companies only. For U.S. citizens and businesses, that means one thing—the BOI reporting burden is (for now) effectively off their shoulders.

Meanwhile, over at the Fifth Circuit Court of Appeals, the legal battle over the constitutionality of the CTA rages on. The case of Texas Top Cop Shop, Inc., et al. v. Garland is set for oral arguments on April 1, a date that now seems more ironic than ominous. While many had pinned their hopes on the courts to rein in the CTA, it appears that regulatory agencies have beaten them to the punch, sidelining enforcement before the judiciary could weigh in.

So, what does this mean going forward? FinCEN has promised an interim rule before March 21, one that is expected to further delay BOI reporting deadlines and invite public comment on a potentially slimmer, more targeted version of the CTA. But for U.S. citizens and domestic businesses, the message is clear: you’re (probably) off the hook (at least for now, and hopefully for good).

Of course, in the legal world, nothing is ever truly final until the ink is dry. At Phillips Murrah, we’ll continue to keep an eye on the CTA’s shifting landscape and provide updates as they unfold. But for now, let’s raise a metaphorical glass to the CTA’s reporting requirements—once looming, now fading into regulatory obscurity. Farewell, Corporate Transparency Act. Until we meet again!

For any lingering questions about the CTA or how these changes might affect you, feel free to reach out to Kayla Kuri at kmkuri@phillipsmurrah.com or your trusted Phillips Murrah representative.

For the latest information on the status of the Corporate Transparency Act, please visit our Corporate Transparency Act Hub.