A Break for Small Businesses
The Anti-Money Laundering Act of 2020 was enacted to protect the financial system from money laundering, terrorism financing, and other illicit activity. One component of this legislation was the Corporate Transparency Act (CTA), which required millions of entities and individuals to register with the Treasury Department and to disclose personal information, including a personal residence address, a copy of a passport, driver's license, or other identification document, and disclosure of the principal place of business of each company, ownership interests exceeding 25%, and who was in direct or indirect control of each entity. In other words, loads of new paperwork.
The CTA went into effect on January 1, 2024, but later that year several lawsuits around the country were filed challenging the new law on various grounds. Injunctions were issued, then narrowed, filing deadlines were extended, and a state of confusion ensued.
On March 2, 2025, the Treasury Department announced that the CTA would be enforced only as to foreign entities. Domestic companies are excused from compliance.
President Trump celebrated the change of policy with the following statement on social media: “Exciting news! The Treasury Department has announced that they are suspending all enforcement of the outrageous and invasive Beneficial Ownership Information (BOI) reporting requirement for U.S. Citizens. This Biden rule has been an absolute disaster for Small Businesses Nationwide. Furthermore, Treasury is now finalizing an Emergency Regulation to formally suspend this rule for American businesses. The economic menace of BOI reporting will soon be no more.”
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