Tax Byte

The U.S. Treasury Department announced on March 2 that it will no longer enforce the Corporate Transparency Act (CTA) or its associated Beneficial Ownership Information (BOI) reporting requirements. This decision effectively halts a rule aimed at combating money laundering and shell company formation.

In a press release, Treasury Secretary Scott Bessent called the move “a victory for common sense” and stated it aligns with “President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”

The Treasury Department confirmed it will not impose penalties against U.S. citizens or domestic reporting companies for non-compliance with BOI reporting requirements, either under existing regulatory deadlines or after forthcoming rule changes. Additionally, the agency plans to issue a proposed rule that will narrow the scope of regulations to apply only to foreign reporting companies.

President Trump criticized the CTA on his Truth Social platform, calling it “outrageous and invasive” and stating, “The economic menace of BOI reporting will soon be no more.” Business leaders and many in the accounting community have opposed the requirements, citing privacy and security concerns about the database and arguing it duplicated information already collected by other government agencies.

BOI reporting has been halted and resumed multiple times, leaving tax and accounting pros—as well as their clients—on unclear footing. This time, the change has been presented with more finality than before, but we will continue to keep you updated with further developments.