FinCEN Axes Corporate Transparency Act’s Reporting Obligations for U.S. Companies and U.S. Persons

Background

Since December of last year, the status of the CTA has been in a state of perpetual flux, following a dizzying series of federal court rulings and FinCEN announcements. On February 28, 2025, we reported that FinCEN paused enforcement actions for entities required to report under the CTA’s Beneficial Ownership Information Reporting Rule (BOI Rule) until FinCEN issued an interim final rule providing new guidance regarding the BOI Rule’s requirements and associated deadlines. Then, on March 2, 2025, Treasury went a step further, indicating that it would altogether cease enforcement against U.S. citizens and domestic reporting companies for violations of the BOI Rule, explaining that it would instead issue proposed rulemaking to narrow the scope of the BOI Rule to “foreign reporting companies” only and set new reporting deadlines. 

Revised Reporting Requirements Under the Interim Rule

On March 21, 2025, FinCEN released its promised Interim Rule. As previewed by Treasury’s March 2, 2025 announcement, the Interim Rule makes three significant changes to the former BOI Rule.

First, the Interim Rule revises the definition of “reporting company” in FinCEN’s regulations implementing the CTA to exempt all domestic entities that were previously captured under the definition of a “domestic reporting company,” including all corporations, limited liability companies, limited partnerships, and other entities formed under the laws of a U.S. state or tribal jurisdiction. Accordingly, no such entity is required to file, update, or correct BOI reports, regardless of whether its beneficial owners are U.S. persons.

Second, the Interim Rule narrows the definition of “reporting company” to include only legal entities formed under the laws of a foreign country and registered to do business in a U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office (Reporting Companies). Furthermore, under a new exemption introduced under the Interim Rule, these Reporting Companies are only obligated to report BOI on their non-U.S. person beneficial owners, where U.S. persons are defined as citizens and residents of the United States. In other words, a Reporting Company that has only U.S. person beneficial owners would be exempt from the requirement to report its beneficial owners and instead, would only be obligated to report information on the entity itself (e.g., name, address, jurisdiction of organization, etc.) and its company applicants, if applicable. A Reporting Company may still qualify for certain other exemptions that existed under the former BOI Rule, including the large operating company exemption.

The Interim Rule makes a similar change to the special rule for foreign pooled investment vehicles, which had previously been required to report the BOI of individuals who exercise substantial control over the entity. The Interim Rule limits this reporting requirement to the individual who exercises the greatest authority over the strategic management of the investment vehicle that is not a U.S. person. If there is no non-U.S. person with substantial control over the foreign pooled investment vehicle, it would not be required to report any beneficial owners. 

Finally, the Interim Rule sets the following deadlines for Reporting Companies: 

• Reporting companies that were registered to do business in a U.S. state or tribal jurisdiction before March 21, 2025 must file BOI reports no later than 30 days from that date (i.e., April 20, 2024); 

• Reporting companies that register to do business in a U.S. state or tribal jurisdiction on or after March 21, 2025, have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.

Additional CTA Updates

In addition to any potential legal challenges to the Interim Rule, the Department of Justice (DOJ) continues to defend the constitutionality of the CTA in litigation. Any future court decisions may further affect the scope of the BOI reporting requirements. It also remains to be seen how the Interim Rule will affect the pending HR 736, a bill that would—if enacted into law—extend the reporting deadline for entities that are a “small business concern,” as defined under 15 U.S.C. 632, to January 1, 2026, or whether Congress itself opts to repeal or curtail the CTA to align with the Interim Rule. Separately, some state legislatures have expressed interest in developing state-specific versions of the CTA, such as the New York LLC Transparency Act (applicable to certain limited liability companies formed or registered to do business in New York), which is slated to take effect on January 1, 2026.

Implications

Foreign entities subject to the definition of a “reporting company” under the Interim Rule should be prepared to submit BOI reports to FinCEN by April 20, 2024 or within 30 days after their registration to do business in the U.S., whichever comes later. Note that Reporting Companies that only have U.S. beneficial owners are exempt from the requirement to report their beneficial owners, but will still be required to report information on the entity itself and its company applicants.

Notably, the Interim Rule did not modify the requirement for holders of FinCEN identifiers to update any changes to their identifying information within 30 days after the date on which the change occurred, even if the FinCEN identifier was obtained in relation to a BOI submission for an entity that no longer falls within the definition of a “reporting company.” FinCEN has yet to propose a mechanism for deactivating FinCEN identifiers or removing previously reported but no longer required BOI from the FinCEN database.

Given the continuously evolving regulatory landscape around the CTA and BOI Rule, Reporting Companies and entities that are presently exempted from the Interim Rule should continue to remain vigilant of further developments. Crowell & Moring will continue to monitor and provide updates on the status of the CTA as appropriate. Please do not hesitate to reach out to your Crowell & Moring contacts or the authors of this alert with any questions.