The Corporate Transparency Act (“CTA”), which was enacted to enhance transparency and combat illicit financial activities, has been at the forefront of legal challenges since it went into effect on January 1, 2024. After being paused, revived, paused again, and revived again, FinCEN announced on February 27, 2025, that it will not issue any fines or penalties or take any other enforcement action against any companies for failure to file or update beneficial ownership information reports.
FinCEN also advised that it intends to issue a proposed rulemaking that will narrow the scope of the CTA to foreign reporting companies only. Under the current text of the CTA, “foreign reporting companies” are defined as entities formed under the law of a foreign country that have registered to do business in the United States by filing a document with a secretary of state or similar office.
It is not clear what FinCEN plans to do with the information provided by entities that have already filed beneficial ownership information reports. However, at this time, it appears that U.S. citizens and domestic reporting companies will no longer have an obligation to file or keep their information up to date with FinCEN.
Abrahams Kaslow & Cassman LLP will continue to monitor CTA developments. If you have any questions, please contact Payton Hostens at (402) 392-1250.