Major Update: U.S. Treasury Exempts Domestic Businesses from Corporate Transparency Act Reporting Requirements

U.S. Treasury Exempts Domestic Businesses from Corporate Transparency Act Reporting Requirements

In a significant regulatory shift, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has announced major changes to the Corporate Transparency Act (CTA) reporting requirements. As of March 26, 2025, most domestic small businesses are now exempt from the Beneficial Ownership Information (BOI) reporting requirements under the CTA.

This development marks a dramatic rollback of the previously implemented rules that required millions of small businesses to disclose ownership details to FinCEN. Below, we break down what this means for business owners and what steps—if any—you need to take moving forward.

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What Has Changed?

The new rule, issued as an interim final rule by FinCEN, removes the BOI reporting requirement for U.S.-based businesses. This means that corporations, LLCs, and similar entities created under state law are no longer required to file beneficial ownership reports.

However, foreign entities that are registered to do business in the U.S. must still comply with the BOI reporting rules.

This policy shift is part of the federal government’s broader initiative to reduce regulatory burdens on small businesses while still maintaining financial transparency for foreign entities operating within the United States.

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Why Was This Change Made?

According to Treasury Secretary Scott Bessent, the decision was driven by a desire to support small businesses and reduce unnecessary government overreach. Many business owners and advocacy groups had expressed concern that the previous rules placed an undue administrative burden on legitimate small businesses, requiring them to file complex ownership reports or risk steep fines and penalties.

By limiting the BOI reporting requirements to foreign entities, the Treasury Department aims to focus its enforcement efforts on potential sources of illicit finance while easing the regulatory burden on American entrepreneurs.

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Who Still Needs to Report?

While domestic businesses are now exempt, foreign entities doing business in the U.S. must still comply with the BOI reporting requirements.

Reporting Deadlines for Foreign Entities:

• Foreign entities registered prior to March 26, 2025, are required to submit their BOI reports by April 25, 2025.

• Foreign entities registered on or after March 26, 2025: Required to file within 30 days of registration.

Foreign businesses should ensure they understand and comply with these requirements to avoid potential penalties.

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What This Means for U.S. Small Businesses

For most U.S.-based small businesses, this rule change is a huge relief. The removal of the BOI reporting requirement means:

✅ No need to file a Beneficial Ownership Report with FinCEN.

✅ No risk of penalties for failing to submit a report.

✅ Less administrative burden when forming and managing a business.

If you own a small business that was previously subject to the reporting requirement, you no longer need to worry about compliance. However, it is always advisable to stay informed about future regulatory updates.

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What’s Next?

While this rule change is already in effect, it remains an interim final rule, meaning further adjustments could be made. Business owners should continue to monitor regulatory developments to ensure they remain compliant with federal and state requirements.

If you have questions about how this change affects your business, or if you need legal assistance with business formation, compliance, or regulatory matters, A. R. Pike Law Firm is here to help.

📞 Contact us today to schedule a consultation and ensure your business remains compliant with the latest legal developments.

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This regulatory update marks a major shift in federal compliance requirements for small businesses. While foreign entities must still comply with BOI reporting, the removal of these requirements for domestic businesses is a win for small business owners nationwide. Stay informed, stay compliant, and let A. R. Pike Law Firm help guide your business through these legal changes.