BlogLine

BOI penalties further suspended against U.S. citizens and domestic corporations

3/3/25

By: William R. Covino and Nancy M. Reimer

Recent developments concerning Beneficial Ownership Information Reports (the “BOI Reports”) and the Corporate Transparency Act (the “CTA”) have likely caused tax practitioners to reconsider how best to advise domestic corporations and foreign entities. Yesterday, we received more certainty on how the CTA will be enforced this year. 

In last week’s client update, we learned the Financial Crimes Enforcement Network (“FinCen”) extended the filing deadline once again. It announced it would “not issue any fines or penalties or take any other enforcement action against any companies based on any failure to file or update [BOI] reports pursuant to the C[TA] by the current deadline.” Instead, FinCen intended to take no further action on enforcing the CTA and its reporting requirement until “a forthcoming interim rule becomes effective and the new relevant due dates in the interim rule have passed.” 

Yesterday, the United States Department of Treasury went a step further, suspending the enforcement of any penalties against U.S. Citizens and Domestic Reporting Companies for failing to comply with the anticipated future reporting deadlines. It announced, “not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but 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 either.” The Treasury emphasized how its decision supports “hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.” 

Not to be left out, on February 10, 2025, the United States House of Representatives passed H.R. 736, a bi-partisan bill aimed at extending the reporting deadlines to January 1, 2026, for reporting companies created or registered to do business before January 1, 2024. The bill contains language repealing or revising aspects of the Corporate Transfer Act’s reporting requirements. It is now pending before the United States Senate. 

For tax practitioners advising foreign entities who will still be required to file BOI Reports in the future, they should continue to advise them to stay vigilant in compiling the information necessary to file future BOI Reports when a deadline is ultimately imposed. We will continue to follow and report further developments concerning the CTA to you.  

For more information on this topic, please contact Nancy Reimer at nancy.reimer@fmglaw.com, Will Covino at william.covino@fmglaw.com or your local FMG relationship partner.