On Sunday, the U.S. Treasury Department announced that it would not enforce the Beneficial Ownership Information (BOI) reporting requirement for U.S. citizens and domestic companies.
Business owners faced a March 21 deadline to complete the report, but the Treasury Department suspended the deadline.
BOI reporting is part of the Corporate Transparency Act (CTA), which passed in 2021 and went into effect in January 2024. The requirement mandated that an estimated 32.6 million small businesses provide personal details, like the names, addresses, and dates of birth, of their owners.
However, its legality was challenged in the courts, and American business owners received ever-changing messages about the report’s deadline and whether it was required.
In a series of posts on X, the Treasury Department stated that it would not impose penalties or fines on U.S. citizens or domestic reporting companies for failing to file a BOI report.
U.S. Treasury Secretary Scott Bessent stated on X that suspending BOI reporting was “part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
President Donald Trump backed the Treasury Department on Truth Social on Sunday for suspending the requirement, calling the BOI report “outrageous and invasive.”
“Furthermore, Treasury is now finalizing an Emergency Regulation to formally suspend this rule for American businesses,” Trump wrote. “The economic menace of BOI reporting will soon be no more.”
Under the emergency regulation, the Treasury Department will suspend BOI reporting altogether for American businesses.
The department wants to narrow the scope of the BOI requirement down from all businesses to just foreign-reporting companies. This means that under the emergency rule, domestic companies are exempt from filing a BOI report.
What Is a BOI Report?
BOI reporting is part of the Corporate Transparency Act (CTA), which passed in 2021 and went into effect in January 2024.
The BOI report outlines who owns a company by requiring businesses with fewer than 20 employees to identify individuals with at least 25% ownership.
The rule aimed to prevent crimes like fraud and money laundering by making ownership structures more transparent.
In order to fill out the BOI report, companies disclose their legal name, any trade names, principal place of business address, jurisdiction of formation or registration, and taxpayer ID number. They also provide the details of each beneficial owner, including full legal name, date of birth, residential address, and unique identifier from a government ID.
Related: This New Under-the-Radar Regulation Will Impact Most Businesses. Here’s What You Need to Know.
