Changes To FinCEN BOI Reporting

BOI Reporting Deadline is March 21, 2025

What will happen if businesses do not complete the required FinCEN reporting?  No one is sure…

The changing rules of Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act (CTA) is shifting yet again, leaving businesses in a state of regulatory “whiplash.” The latest change? On February 27, 2025, the Financial Crimes Enforcement Network (FinCEN) announced that it will not issue fines, penalties, or take enforcement actions for failure to file BOI reports—at least until a forthcoming interim final rule establishes new deadlines. The new rule is expected by March 21, 2025, but even that may not be the final word.

A Timeline of Changes

• January 1, 2024: The CTA’s BOI reporting requirements officially go into effect.
• February 17, 2025: A federal court ruling in Smith v. United States Department of the Treasury lifts an injunction that previously delayed enforcement of these requirements.
• February 18, 2025: FinCEN responds by extending reporting deadlines by 30 days, signaling an intent to reevaluate compliance burdens.
• February 27, 2025: In a surprise move, FinCEN announces it will not issue penalties or take enforcement action on BOI filings until new deadlines are set via an interim final rule, expected by March 21, 2025.
• March 21, 2025 (Upcoming): FinCEN is expected to publish the new interim final rule with revised deadlines and potentially modified reporting requirements.

Why the Sudden Change?

FinCEN has two primary reasons for this delay:

• Regulatory Burden on Small Businesses: The treasury has acknowledged the challenges posed by BOI reporting requirements and is looking to ease compliance.
• National Security and Law Enforcement Prioritization: FinCEN wants to focus on entities with significant national security and financial crime risks, rather than creating unnecessary burdens for all reporting companies.

Litigation, Pushback, and Future Changes

• Legal challenges are still playing out, with pending cases in the Fourth, Fifth, and Eleventh Circuit Courts of Appeal.
• Lawmakers are considering legislative changes, such as the “Nunn bill,” which would push filing deadlines to January 1, 2026.
• Some legal analysts predict future enforcement will shift focus to foreign-owned businesses rather than domestic companies.

What Should Businesses Do Now?

With FinCEN’s February 27 announcement effectively pausing enforcement, many businesses may wonder whether they should delay filing altogether. Here’s what to consider:

• Prepare for Additional Pivots: While interim guidance suggests FinCEN will not be subjecting U.S. business owners to penalties for late filing, it is prudent to file a report as soon as Published penalties are up to $591 per day for civil violations; criminal penalties are up to $10,000 in fines and up to 2 years of imprisonment.
• Stay Informed: BOI reporting rules are changing rapidly. Businesses should keep track of FinCEN updates and legal developments.
• Consider Submitting Comments: FinCEN will be soliciting public input on potential revisions to BOI reporting rules. Now is the time for businesses to voice concerns.

The Takeaway

The CTA’s BOI reporting requirements have been a moving target, and businesses are right to feel a sense of “whiplash” from the rapid changes. While enforcement is currently on hold, companies should stay informed and be prepared for sudden changes to the rules and potentially new deadlines. As always, legal counsel can help navigate this uncertain regulatory environment.

Dallo Law Group will continue to track these developments and provide updates. If you have questions about your BOI reporting obligations, contact us today.

Contact: 619-912-0616