Regulatory changes can often feel like a moving target, and the Corporate Transparency Act (CTA) is no exception. As accountants, we know that when new reporting requirements emerge, our clients rely on us to break down the details and help them stay compliant. The CTA was designed to promote financial transparency and prevent illicit activities like money laundering, but its rollout has been anything but smooth. With legal challenges, shifting deadlines, and potential legislative changes, it’s critical for businesses to stay informed. Here’s what you need to know—and how we can help our clients navigate these changes with confidence.

What is the Corporate Transparency Act (CTA), and Why Does It Matter?

The CTA requires certain business entities—such as corporations and LLCs—to report their beneficial ownership information (BOI) to FinCEN. This is meant to prevent individuals from using anonymous business structures for fraudulent or illegal purposes. While the intent is clear, the process has been complicated by legal challenges and changing deadlines, leaving many business owners asking: Do we even have to file? And if so, when?

Changes to BOI Reporting Requirements

When the CTA was first introduced, the deadlines seemed straightforward. Businesses formed before January 1, 2024, were required to file BOI reports by December 31, 2024. Any business formed on or after January 1, 2024, had 90 days from its formation to submit the necessary information. But recent legal challenges have upended this timeline, making compliance more confusing.

In January 2025, the U.S. Supreme Court lifted a legal hold that had temporarily paused enforcement of the CTA. A few weeks later, in February, a separate court ruling reinstated BOI reporting requirements for most companies. As a result, FinCEN revised its guidance, extending the reporting deadline to March 21, 2025, though some businesses may qualify for extensions.

The Treasury Department’s Enforcement Pause

Just as businesses were trying to catch up with these new deadlines, the Treasury Department announced another significant change. On March 2, 2025, the Treasury stated that it would not enforce any penalties or fines for noncompliance under the current BOI reporting deadlines. This means that for now, businesses won’t face immediate consequences for missing the March 21 deadline.

The Treasury also indicated that it plans to adjust the CTA’s scope, potentially limiting BOI reporting primarily to foreign entities rather than domestic businesses. This means additional changes could be on the horizon, making it even more important for business owners to stay updated on the latest regulations.

Potential Legislative Changes: Another Extension?

In addition to regulatory changes, Congress is considering further adjustments. The Protect Small Businesses From Excessive Paperwork Act (H.R. 736) was passed by the U.S. House of Representatives on February 10, 2025. If this bill becomes law, it would push the BOI reporting deadline to January 1, 2026, for businesses formed before 2024, giving small business owners more time to comply. However, nothing is set in stone yet, and businesses should prepare for compliance rather than assume an extension will be granted.

What Should Businesses Do Now?

Even with the current enforcement pause, businesses shouldn’t assume they are off the hook. The CTA is still in effect, and once enforcement resumes, penalties could be steep—up to $591 per day for noncompliance, with additional criminal penalties for willful violations.

As accountants, we can help our clients take the right steps now to avoid issues later. Here’s how:

• Confirm filing obligations – Many small businesses aren’t even sure if they need to file. Now is the time to assess their status and provide clear guidance.
• Gather required ownership information – Instead of waiting until the last minute, businesses should start collecting the necessary details on their beneficial owners.
• Stay informed about regulatory changes – With Treasury and Congress both considering further revisions, it’s important to track updates and adjust compliance plans accordingly.
• Encourage proactive compliance – Even if enforcement is currently on hold, getting ahead of the requirements will prevent future headaches when deadlines are reinstated.

The Corporate Transparency Act continues to evolve, and while the recent enforcement pause provides some relief, it doesn’t mean businesses can afford to ignore their compliance obligations. Our role as accountants is to help clients understand these shifting regulations, prepare for potential deadlines, and avoid unnecessary penalties. By staying informed and offering strategic guidance, we can ensure our clients remain compliant without unnecessary stress. Now is the time to prepare—before the next regulatory change catches businesses off guard.

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