The U.S. Treasury Department announced in April that “domestic reporting companies” (companies formed in the United States) are now exempt from the Beneficial Ownership Information Report (BOIR) filing requirement under the Corporate Transparency Act. This is welcome news for business owners who want to maintain privacy and for others who are getting whiplash trying to follow court cases on whether they have to file or not.
A Brief History of the Corporate Transparency Act
Congress passed the Corporate Transparency Act (CTA) in 2021 to thwart illegal activities such as money laundering. It does this by forcing business owners to reveal who is behind the business. The act, which became effective in 2024, required companies to submit Business Ownership Information Reports (BOIR) detailing the ownership interests of for-profit domestic and foreign entities. The reporting companies included corporations and limited liability companies. Nonprofit companies were exempt from this requirement.
The reports were to be submitted to the Treasury’s Financial Crimes Enforcement Network (FinCEN). This government agency examines financial transactions for national security and anti-money laundering purposes.
The BOIR requirement faced many challenges, especially from business owners who declared the reporting requirements too burdensome and invasive. For companies formed before January 1, 2024, the filing deadline was January 1, 2025.
Timeline of the BOIR Requirement Controversy
Over the past four months, this regulatory requirement has been litigated over questions such as whether Congress had the authority to enact the CTA and the constitutionality of the reporting rules. The BOIR requirement was paused and reinstated, leaving many beneficial owners wondering how to proceed.
December 3, 2024: In the case of Texas Top Cop Shop, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction to bar enforcement of the BOIR requirement.
December 23, 2024: The U.S. Court of Appeals for the Fifth Circuit lifted the injunction allowing the BOI reporting, and FinCEN moved the reporting deadline to January 13, 2025.
December 26, 2024: The U.S. Court of Appeals for the Fifth Circuit reversed its decision and reinstated the injunction until it could consider the merits of the parties’ cases.
January 7, 2025: The U.S. District Court for the Northern District of Texas issued another injunction in Smith v. U.S. Department of the Treasury, enjoining nationwide enforcement of the CTA.
January 23, 2025: The U.S. Supreme Court lifted the December 3, 2024 injunction (Texas Top Cop Shop). However, the January 7th injunction (Smith v. U.S. Department of the Treasury) remained in place.
The CTA Will Not Be Enforced
The Treasury Department announced through a March 2, 2025 press release that it will no longer enforce the CTA against U.S. citizens and domestic reporting companies. In April, it clarified the rule that the CTA only applies to foreign reporting companies.
U.S. Secretary of the Treasury Scott Bessent said it was a “victory for common sense” since it would eliminate burdensome requirements for small business owners.
Related Resources
- Injunction Bars Beneficial Ownership Information Report Requirement (FindLaw Law and Daily Life)
- What is the New Beneficial Ownership Information Report Requirement for LLCs and Corporations? (Learn About the Law – Small Business Law)
- Small Business Law (Learn About the Law – Small Business Law)
