Treasury Department Pivots Again on CTA Reporting Requirements

By Michael E. High, Brittany H. Michaud, and Andrew C. Sweeney

March 5, 2025

The rules on the Corporate Transparency Act (CTA) have changed once again. On March 2, 2025, the U.S. Department of the Treasury issued a press release announcing that it will not enforce the CTA against U.S. citizens and domestic reporting companies and their beneficial owners under the current reporting rules as well as under forthcoming rule changes to the CTA reporting requirements. The Treasury Department noted its proposed rule will narrow the scope of the CTA to apply only to foreign reporting companies.[1] Under the proposed rule, domestic reporting companies would no longer be required to file beneficial ownership information (BOI) reports under the CTA. Additionally, domestic reporting companies and United States citizens would not be subject to fines or penalties thereunder.

In light of the Treasury Department’s announcement, reporting companies, both foreign and domestic, should stand by for the Treasury Department’s proposed rule as the exact contours of their obligations under the CTA come into focus. Until the time of the proposed rule’s effectiveness or yet another shift in guidance from the Treasury Department that is contrary to its March 2, 2025 announcement, domestic companies and U.S. citizens are no longer under any obligation to file BOI reports or to keep information in previously filed BOI reports up to date given the suspension of enforcement.

If you have any questions, please contact your principal at Drummond Woodsum and more generally you may want to consult our prior alerts which can be found at: CTA Reinstated and Other Potential Developments – Drummond Woodsum; NEW UPDATE Regarding the Corporate Transparency Act – Drummond Woodsum Corporate Transparency Act Requirements Reinstated; UPDATE on the Corporate Transparency Act – Drummond Woodsum; The CTA: Time is Running Out – Drummond Woodsum; Get Ready for the Corporate Transparency Act – Drummond Woodsum.

[1] Assuming the definition of “foreign reporting company” is the same in the proposed rule as it is in the CTA currently, a “foreign reporting company” is a (i) corporation, limited liability company or other similar entity, (ii) formed under the laws of a foreign country and (iii) registered to do business in the United States by filing of a document with a secretary of state or a similar office under the laws of a state or Indian tribe.