From Accounting Today — By Michael Cohn —
The Treasury Department formally published an interim final rule Wednesday, March 26, limiting the scope of the Corporate Transparency Act’s beneficial ownership reporting requirement to foreign companies.
The Treasury Department’s Financial Crimes Enforcement Network issued the interim final rule, removing the requirement for U.S. businesses to report on their true ownership to FinCEN.
The interim final rule takes effect immediately, but FinCEN is still accepting comments and intends to finalize the rule this year.
“It is important to rein in burdensome regulations to the benefit of hard-working American taxpayers and small businesses,” said Treasury Secretary Scott Bessent in a statement Wednesday. “As we continue to releverage the private sector and deleverage the government, we are reviewing all regulations to ensure they are fit-for-purpose, in furtherance of our ambitious economic growth agenda on behalf of the American people.”
The move reflects an announcement earlier this month in which FinCEN said it would no longer enforce the CTA, nor enforce any penalties or fines associated with beneficial ownership reporting under the existing regulatory deadlines. However, FinCEN left open the possibility of enforcing it against foreign companies, saying it planned to issue a proposed rulemaking that would narrow the scope of the rule to foreign reporting companies only.
In the interim final rule, FinCEN revised the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN is also exempting entities previously known as “domestic reporting companies” from BOI reporting requirements.