The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced yesterday that it is suspend enforcement of the Corporate Transparency Act (CTA) while it crafts a new set of regulations that will ultimately narrow the scope of the reporting regime. The highly controversial provisions seemed to cast every business in a negative light by requiring extensive disclosures and information, as if under a criminal investigation – which was seen as a gross overreach by the government. The official announcement reads in part:
“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.” [Emphasis added.]
It was also reported that the Treasury Department will likely be issuing a proposed rulemaking that will narrow the scope of the rule to only foreign reporting companies. These steps are in lieu of a Congressional legislative fixed that my either eliminate the provision in the CTA, or substantially amend it with narrowing language to bring the matter to a close.
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