Corporate Transparency Act Enforcement Paused by Treasury Department

The Corporate Transparency Act (CTA) was enacted in 2021 as part of the Anti-Money Laundering Act of 2020 to combat illicit financial activity, such as money laundering, tax fraud and financing of terrorism. The CTA requires certain business entities to report information about the company and its beneficial owners to Financial Crimes Enforcement Network (FinCEN). 

On Feb. 27, 2025, FinCEN announced that it would not enforce CTA reporting requirements and would issue an interim final rule in the coming weeks. On March 2, 2025, the Department of the Treasury issued an additional announcement that it would not enforce penalties under the CTA. 

Employers can expect interim rules from FinCEN to be issued by March 21, 2025. However, the Department of the Treasury has indicated that it will not enforce any reporting requirements for U.S. citizens or domestic reporting companies under such future rules and that it plans to issue a new rule to narrow the CTA’s scope. Therefore, employers should anticipate uncertainty and monitor for updates from the government and pursuant to ongoing legal challenges.