The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.
The Treasury Department announced on Monday, March 3, 2025, that, with respect to the Corporate Transparency Act, 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 Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.
As a refresher, on January 1, 2024, a new law known as the Corporate Transparency Act (CTA) was enacted. This law required that certain owners of registered entities provide personal information to a new database created by the US Treasury Department’s Financial Crimes Enforcement Network (called “FinCEN” for short). With limited exceptions, this requirement applied to all registered entities, like Limited Liability Companies (LLC), Limited Partnerships (LP), and corporations across all states. The database was intended to help FinCEN monitor and investigate criminal activity.
The CTA resulted in a number of lawsuits that delayed its enforcement. Had it been enforced, small businesses faced civil penalties of up to $10,000.00 and/or up to 2 years imprisonment. This would have resulted in yet another cost for businesses and, in the end, an increase for the consumer. “This is a victory for common sense,” said U.S. Secretary of the Treasury Scott Bessent. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, particularly for small businesses that are the backbone of the American economy.”
As with any legal matter, if you have questions regarding the Corporate Transparency Act, you should consult an attorney familiar with business entity law. © 2025
Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas. (936)295-6394 www.moakandmoak.com
