Since its introduction, the Corporate Transparency Act (CTA) has sparked ongoing confusion and back-and-forth over its implementation. With its complex reporting requirements and shifting timelines, many business owners have been left uncertain about their obligations.
Throughout this process, ABMA has remained steadfast in its efforts to delay enforcement and ensure that its members are informed and supported. This article provides an update on the latest developments surrounding the CTA, including the Treasury Department’s suspension of enforcement and the upcoming changes to its scope, as well as guidance on what businesses need to do moving forward.
ABMA members, take note: The Treasury Department has announced that it will not enforce penalties or fines related to the Corporate Transparency Act’s beneficial ownership reporting requirements for U.S. citizens and domestic reporting companies. Additionally, Treasury plans to revise the rule to apply only to foreign reporting companies in an upcoming rulemaking process.
This means that, for now, U.S. businesses are not required to file under the CTA, and no penalties will be enforced. ABMA will continue monitoring developments and provide updates as the rulemaking process unfolds.
For members who have already filed, there is no need for further action at this time. If you have not yet filed, you may wait for further guidance from Treasury before taking any steps.
What is the Corporate Transparency Act (CTA)?
The Corporate Transparency Act (CTA), enacted in 2021, is a federal law aimed at combating financial crimes by requiring most U.S. businesses to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). The law is designed to increase transparency and prevent the use of anonymous shell companies for money laundering, tax evasion, and other illicit activities. Originally set to take effect on January 1, 2024, its implementation has faced legal challenges, leading to temporary enforcement suspensions for certain entities.
Timeline of the Corporate Transparency Act (CTA) Decisions Beginning with Most Recent
- March 2, 2025 – Treasury Department Suspends CTA Enforcement
- The Treasury Department announced a suspension of enforcement against all U.S. citizens and domestic reporting companies due to ongoing legal challenges.
- While the CTA remains law, FinCEN will not require reporting until further legal clarity is established.
- February 20, 2025 – 11th Circuit Court Grants Injunction
- The 11th Circuit Court of Appeals expanded the Alabama district court’s ruling, further delaying CTA enforcement for additional parties challenging the law.
- March 4, 2024 – FinCEN Responds to Court Ruling
- FinCEN confirmed it would not enforce CTA compliance against the specific plaintiffs in the Alabama case but maintained that reporting requirements remained in effect for all others.
- March 1, 2024 – Federal Court Strikes Down CTA
- The U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act is unconstitutional, arguing that it exceeded Congress’s authority.
- The ruling initially applied only to the plaintiffs in the case but opened the door for broader legal challenges.
- January 1, 2024 – CTA Reporting Requirements Take Effect
- Newly created entities were required to begin submitting Beneficial Ownership Information (BOI) reports to FinCEN.
- Existing companies were given until January 1, 2025, to comply.
- September 29, 2022 – Final Rule Issued
- FinCEN published the final rule outlining reporting requirements, setting the January 1, 2024, compliance start date.
- January 1, 2021 – CTA Enacted
- The Corporate Transparency Act was signed into law as part of the National Defense Authorization Act (NDAA) after Congress overrode President Trump’s veto.
- The law was designed to combat illicit financial activity by requiring many businesses to report their beneficial owners to FinCEN.
