Treasury sets new deadline for businesses to report ownership information

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Treasury sets new deadline for businesses to report ownership information

Former U.S. Treasury Secretary Janet Yellen speaks to staff at the Financial Crimes Enforcement Network on Jan. 8, 2024 in Vienna, Virginia. 

Samuel Corum | Getty Images News | Getty Images

The Treasury Department has set a new deadline of March 21 for millions of businesses to fulfill a new reporting requirement on “beneficial ownership information,” after a court order allowed the federal agency to start enforcing the measure.

The Corporate Transparency Act, which Congress enacted in 2021, requires small businesses to disclose the identity of people who directly or indirectly own or control the company. The measure aims to prevent criminals from hiding illicit activity conducted through shell companies or opaque ownership structures, according to the Treasury.

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Businesses have suffered a degree of whiplash from the on-again-off-again deadlines to file BOI reports. A string of court orders had prevented the Treasury from enforcing the measure, only to then see courts strike down those rulings.

The U.S. District Court for the Eastern District of Texas on Feb. 18 lifted a nationwide injunction that had prevented the Financial Crimes Enforcement Network, known as FinCEN, which is part of the Treasury, from enforcing the Corporate Transparency Act.

Room for more delays?

The BOI reporting measure applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

Businesses and owners that don’t comply with reporting rules are 

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 civil penalties of up to $591 a day, adjusted for inflation. They could also face up to $10,000 in criminal fines and up to two years in prison.

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FinCEN left the possibility of further delays on the table even as it extended its previous reporting deadline by 30 days.

“FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided,” according to a Feb. 18

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FinCEN also said it would prioritize enforcement for businesses that “pose the most significant national security risks.”

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