BOI reporting has been a significant topic since FinCEN introduced the Corporate Transparency Act. Over the past year, U.S. businesses have experienced a series of changes in deadlines, requirements, and exemptions, creating a roller coaster of compliance efforts. Now, there’s a pivotal update that reshapes the landscape!
The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department, has announced an interim final rule. This rule eliminates the need for U.S.-based companies and individuals to report beneficial ownership information (BOI) as mandated by the Corporate Transparency Act (CTA).
The National Federation of Independent Business (NFIB), which had previously sued to block the CTA, praised the rule. “This is a massive win for small businesses,” said NFIB President Brad Close. “The CTA’s reporting requirements are outrageous and invasive.
Under the new rule, FinCEN has revised the definition of a “reporting company” to include only foreign entities — specifically, those formed under foreign law registered to do business in any U.S. state or tribal jurisdiction. These were previously referred to as “foreign reporting companies.” As a result, domestic companies are no longer required to report BOI to FinCEN.
This change follows a prior announcement from FinCEN earlier this month, stating it would suspend enforcement of the CTA and halt penalties related to BOI reporting — although it kept the door open to future enforcement against foreign entities.
Key Changes in the Interim Rule:
- All entities formed in the U.S. — previously considered “domestic reporting companies” — are now exempt from BOI reporting.
- Foreign entities that meet the revised definition of “reporting company” must still file BOI reports unless exempt.
- U.S. individuals who are beneficial owners of such foreign entities do not have to report their ownership to FinCEN.
What Remains the Same?
- FinCEN’s BOI e-filing system remains active.
- The option to request a FinCEN Identifier is still available.
Note: FinCEN has not confirmed whether existing filings by domestic companies will be deleted or retained.
Deadlines for Foreign Reporting Companies:
- Entities registered before the rule’s publication: BOI reports must be filed within 30 days of the rule’s publication date.
- Entities registered on or after the publication date: BOI reports are due within 30 days of receiving registration confirmation.
Conclusion
Because this is an interim rule, it’s subject to change — especially as legal challenges or legislative pushbacks continue. For now, domestic companies can take a breath of relief as they are no longer required to report their beneficial owner information (as of now). If the rule gets finalized, around 99% of the entities would be exempt from BOI reporting. However, foreign entities registered in the U.S. are still required to file BOI reports. Tax1099’s BOI filing service can help streamline the process and keep your sensitive information safe and secured.
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