FinCEN Issues Interim Rule Narrowing BOI Reporting Requirements

For more than a year, U.S. businesses have been preparing to comply with new federal reporting requirements under the Corporate Transparency Act (CTA), aimed at identifying beneficial owners and curbing illicit financial activity. The rules, which took effect in January 2024, were expected to apply to more than 32 million companies across the country.

On March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that significantly narrows the scope. The new rule exempts domestic companies from filing BOI reports and limits foreign reporting to non-U.S. beneficial owners. While not yet permanent, it marks a rollback of one of the most expansive federal reporting requirements in recent decades. The change comes in response to legal challenges, administrative delays, and shifting regulatory priorities. To help clients, prospects, and others, WhippleWood CPAs has summarized the key details below.

Key Changes Under the Interim Rule

FinCEN’s interim rule redefines the term “reporting company” to exclude entities created under U.S. law. As a result, corporations, limited liability companies, and other domestic business entities are no longer required to submit BOI reports. They are also not required to update or correct previously filed information.

In addition, U.S. persons (defined as U.S. citizens or legal residents who are beneficial owners of a company) are no longer subject to reporting, even if they have ownership in a foreign reporting company.

Foreign reporting companies must still comply with BOI requirements, but only if they have one or more non-U.S. beneficial owners. Entities that were registered to do business in the United States before March 26, 2025, must file their initial BOI reports by April 25, 2025. Those registered on or after March 26 must file within 30 calendar days of receiving notice that their registration is effective.

Timeline of Events

The March 26 interim final rule did not arrive in isolation. It followed a wave of legal challenges and regulatory decisions that altered the federal government’s approach to beneficial ownership reporting. Below is a timeline of key developments that led to the current pause in enforcement for most U.S. businesses.

• January 1, 2024 – BOI Reporting Requirements Take Effect – FinCEN’s final rule under the Corporate Transparency Act became effective, requiring newly formed entities to report beneficial ownership information within 90 days of registration. Existing entities were originally required to file their initial BOI reports by January 1, 2025.
• December 3, 2024 – CTA Enforcement Halted in Texas Top Cop Shop, Inc. v. Garland – The U.S. District Court for the Eastern District of Texas ruled the CTA unconstitutional and issued a nationwide injunction, citing concerns about privacy rights and the burden on small businesses.
• January 31, 2025 – Executive Order Calls for Deregulatory Review – Executive Order 14192 instructed federal agencies to review regulations that may impose compliance costs on individuals and small entities.
• March 2, 2025 – Treasury Suspends Enforcement for Domestic Entities – In response to court rulings and the executive directive, the Treasury Department announced suspension of enforcement of the CTA and BOI reporting obligations for domestic companies.
• March 26, 2025 – FinCEN Issues Interim Final Rule – FinCEN formally narrows the reporting requirement to apply only to foreign entities with non-U.S. beneficial owners. Domestic companies and U.S. persons are no longer subject to BOI reporting.

Practical Implications for Business Owners

For most business owners operating in the United States, the interim rule removes the requirement to file, update, or correct BOI reports. Companies that were formed under the laws of any U.S. state or tribal jurisdiction are no longer considered reporting companies under the current rule and are not subject to reporting obligations.

Businesses that already submitted BOI reports are not required to take further action unless future rulemaking reinstates the requirement. U.S. persons who are beneficial owners of foreign entities are also excluded from the current scope of reporting.

Foreign entities registered to do business in the United States must still comply if they have non-U.S. beneficial owners. These entities are required to file BOI reports within 30 calendar days of registration, or by April 25, 2025, if registered prior to March 26.

Continued Debate and Next Steps

Although the interim rule suspends reporting requirements for most U.S. businesses, foreign entities with one or more non-U.S. beneficial owners must still comply. According to FinCEN, these entities present a higher risk of being used to conceal illicit activity, including money laundering, and remain a focus of enforcement.

At the same time, the future of the Corporate Transparency Act is still uncertain. The interim rule is not a final policy decision. FinCEN is accepting public comments and expects to issue a final rule later in 2025.

Ongoing debate reflects a wide range of perspectives. Some stakeholders continue to raise concerns about privacy, long-term uncertainty, and the proportionality of potential penalties. Others are calling for a more risk-based approach that focuses on entities with higher potential for misuse. On the other hand, some in the law enforcement community caution that narrowing the CTA may limit the government’s ability to detect and disrupt criminal enterprises that use shell companies to obscure ownership and move illicit funds.

The final rule may further clarify or revise the scope of BOI reporting. While most domestic businesses remain exempt for now, future changes are still possible.

Contact Us

Business leaders are encouraged to stay informed, document ownership structures, and consult with advisors to assess whether future action may be necessary. While most domestic businesses are currently exempt, the situation may change as the federal government evaluates its long-term approach to beneficial ownership transparency. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Whipplewood CPAs can help. For additional information call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.