U.S. citizens and businesses will not be subject to fines or penalties for failing to file beneficial ownership information (BOI) reports after new reporting deadlines are set, Treasury said Sunday in a news release.
Last week, the Financial Crimes Enforcement Network (FinCEN) said it would announce new BOI reporting deadlines no later than March 21.
But on Sunday, Treasury said “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.”
Treasury will issue proposed rulemaking that will “narrow the scope of the rule to foreign reporting companies only,” the news release said.
BOI requirements were established as part of the Corporate Transparency Act (CTA), P.L. 116-283, passed by Congress in 2021.
“This is a victory for common sense,” Treasury Secretary Scott Bessent said in Sunday’s release. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
FinCEN had estimated that 32 million small businesses would have to report BOI, which provided details on who owned or controlled them.
The BOI reporting requirements resulted in numerous court challenges. In addition, the U.S. House earlier passed a bill to extend the BOI reporting deadline for most small businesses. A companion bill was introduced in the Senate.
Background
Under the CTA, which Congress passed in 2021 as an anti-money-laundering initiative, reporting companies must disclose the identity and information about beneficial owners of the entities. For new entities incorporated after Jan. 1, 2024, reporting companies must also disclose the identity of “company applicants” — defined as any individual who files an application to form a corporation, limited liability company, or other similar entity.
Most reports were originally due by the start of 2025; however, FinCEN pushed that date to Jan. 13, a deadline that the injunctions made null. FinCEN then pushed the deadline to March 21, before last week’s announcement about extending deadlines.
Willful violations had been punishable by a fine of $606 a day, up to $10,000, and two years in prison with similarly serious penalties for unauthorized disclosure.
AICPA advocacy
The AICPA and state CPA societies wrote numerous letters to Congress and FinCEN, urging a delay in the reporting deadline.
“The AICPA will continue monitoring this very closely,” Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, said in a LinkedIn post Monday.
The AICPA regularly updates its BOI reporting resource center.
— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.
