Yet another update about the controversial
Financial Transparency Act and the
Beneficial Ownership Information (BOI) reporting requirements. The deadline is once again extended and they are narrowing the scope of the law.
The law is controversial for a number of reasons. First is the fact that medium to large corporations are completely except from the reporting requirements. The law only applies to small businesses, small associations that are incorporated without 501(c)3 status, freelancers that have an LLC, very small mom & pop stores, and other small organizations. Anyone rich can easily make themselves exempt from this law.
Second is that fact that the information they are requesting is already being collected by the states and the banks. This not only makes it redundant, it skirts around the 4th amendment by forcing you to disclose information that would normally require a warrant. In fact, arguably, that is the entire purpose of the law: to avoid having to get a warrant based on probable cause.
This is why there are numerous lawsuits challenging this law and reporting requirements, all asserting that this law is unconstitutional.
The
U.S. Treasury Department wrote in this
post on Feb 27, 2025:
FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.
Rumors are that they will change the regulations so that it only applies to foreign corporations and limited liability companies, or companies controlled by foreign investors. FinCEN states it will be announcing the revised rules soon.
