Corporate Transparency Act Update: Treasury Department Suspends Enforcement of CTA for U.S. Companies and Announces Upcoming Rule Changes

Published: March 6, 2025

by Jeanne L. Vance, Josh P. Concepcion

On March 2, 2025, the U.S. Department of the Treasury announced a major shift in its approach to the Corporate Transparency Act (“CTA”). The Treasury Department stated that it will not enforce any penalties or fines related to the CTA’s reporting requirements against U.S. citizens, domestic reporting companies, or their beneficial owners, both under the current deadlines and after forthcoming rule changes take effect. Additionally, the Treasury Department has indicated that it plans to issue a proposed rule that would limit the CTA’s reach to foreign reporting companies only. At this stage, however, no formal rule change has been enacted which means that the original compliance dates and penalties are still current law.

Key Update: Suspension of Enforcement & Potential Regulatory Changes

The Treasury Department’s statement introduces several key considerations for businesses:

  • No Enforcement Against U.S. Companies: The Treasury Department has stated that it will not impose penalties or fines on U.S. citizens, domestic companies, or their beneficial owners under the existing regulatory guidelines and after the forthcoming rule changes take effect.
  • Potential Rule Change: The Treasury Department has announced plans to propose a rule that would narrow the CTA’s scope to apply only to foreign reporting companies.
  • Regulatory Uncertainty Remains: While this announcement signals a shift in enforcement approach, the law itself has not changed, and businesses should continue to monitor developments closely.

Business Considerations

Until formal regulatory action is taken, businesses should remain informed:

  • Domestic Companies May See Relief: If the proposed rule is enacted as described, U.S.-based businesses would no longer be required to report under the CTA. However, at this time, there is still a legal obligation to report beneficial ownership information to the U.S. Treasury Department.
  • Foreign Entities Likely to Remain Covered: Based on Treasury’s statement, CTA compliance obligations may continue to apply to foreign reporting companies even after there is a final rule change.
  • Uncertainty in Compliance Requirements: While the Treasury Department has announced its intent to limit the CTA’s application, businesses should be prepared for the possibility of further modifications as the regulatory process unfolds.

Next Steps for Businesses

Given the Treasury Department’s announcement, businesses should take a cautious approach:

  1. Stay Informed: Until the proposed rule is formally adopted, businesses should continue to monitor updates from the Treasury Department and FinCEN.
  2. Maintain Compliance Plans: While the Treasury Department has stated that it will not enforce any penalties or fines associated with the current beneficial ownership information reporting rule, the existing CTA reporting requirements remain in place unless and until a rule change is officially implemented.
  3. Consult Legal Counsel: Companies with international operations or foreign ownership components should continue evaluating whether they will still be subject to CTA requirements once the regulatory landscape is clarified. Our CTA Compliance Team at Weintraub Tobin is available to provide guidance on navigating these developments.

If you have any questions about your reporting obligations under the CTA, please contact your legal counsel at Weintraub Tobin or any member of the Weintraub Tobin Corporate Transparency Act compliance team.

For more details, the Treasury Department’s full statement can be accessed here.