The Chronicles Of Grant County
11,667 Entities Versus 32,556,929 Entities
Part Seven
(The image was provided courtesy of the United States Department of the Treasury.)
An interim final rule has been issued by the United States Department of the Treasury that reduces the number of entities that have to report to the Financial Crimes Enforcement Network (FinCEN) from 32,556,929 to 11,667.
This is one of the anticipated final steps necessary to remove the specific requirements for the majority of businesses in the United States to file Beneficial Ownership Information (BOI) reports to the FinCEN under the Corporate Transparency Act (CTA).
In a news release issued on March 21, 2025, the U S Department of the Treasury stated the BOI reporting requirements no longer applied to "U S companies and U S persons."
In a 36-page document filed with the Federal Register on March 21, 2025, the U S Department of the Treasury laid out the specific details of the regulations and the changes to be made in its enforcement.
The interim final rule issued on March 21, 2025, "…retains the requirement for foreign reporting companies, and their beneficial owners (excluding U S persons), to report their BOI to [the] FinCEN, while extending the deadline for those companies to file initial BOI reports, or update or correct previously filed BOI reports, to 30 days after the date of this publication or 30 days after their registration to do business in the United States, whichever comes later."
In a filing with the Federal Register on September 30, 2022, the U S Department of the Treasury indicated that "…the estimated cost per initial BOI report ranges from $85.14 to $2,614.87, depending on the complexity of a reporting company's beneficial ownership structure. That cost does not change depending on whether reporting companies have to incur it within one year or two years of the rule's effective date. If all 32,556,929 existing reporting companies have to incur it in the same single year, the aggregate cost to all existing reporting companies is approximately $21.7 billion for Year 1, after applying the beneficial ownership distribution assumption."
Additional billions in costs were anticipated to be the result of business entities having to update their initial BOI reports in future years.
A few additional quotes from the filing with the Federal Register on March 21, 2025:
"The CTA recognizes that BOI reporting requirements impose burdens on businesses. The CTA therefore directs the Secretary [of the Treasury] to 'minimize burdens on reporting companies associated with the collection of the information…in light of the private compliance costs placed on legitimate businesses.' The CTA also authorizes the Secretary [of the Treasury] to exempt from the reporting requirements 'any entity or class of entities' if the Secretary [of the Treasury], with the written concurrence of the Attorney General [of the U S] and the [U S] Secretary of Homeland Security, determines that 'requiring beneficial ownership information from the entity or class of entities…would not serve the public interest' and 'would not be highly useful in national security, intelligence, and law enforcement agency efforts to detect, prevent, or prosecute money laundering, the financing of terrorism, proliferation finance, serious tax fraud, or other crimes.'"
"This rule does not impose any new obligations, but rather exempts domestic reporting companies and U.S. persons who are beneficial owners of foreign reporting companies from the Reporting Rule requirements, and it relaxes the deadlines for reporting obligations for foreign reporting companies. Thus, this rule may be immediately effective under 5 U.S.C. 553(d)(1) as a 'substantive rule which grants or recognizes an exemption or relieves a restriction.' For the same reason, a delayed effective date is unnecessary: because this interim final rule exempts domestic reporting companies and U S persons who are beneficial owners of foreign reporting companies from the Reporting Rule requirements, rather than imposes obligations, the public does not need time to prepare to comply with it. Moreover, as explained in Section III, delaying the effective date of this rule would be impractical and unnecessary. FinCEN therefore finds good cause for making this rule effective immediately upon publication in the Federal Register,
as permitted by 5 U.S.C. 553(d)(3)."
In this filing with the Federal Register, the U S Department of the Treasury stated that the revised enforcement procedures will result in 11,667 entities having to file BOI reports with the FinCEN.
No word yet on what happens to the information provided by the millions of businesses and individuals that have already filed BOI reports with the FinCEN.
As noted previously in this news series, businesses may want to contact an attorney or another professional of their choice to determine whether they are required to file a BOI report or if they may be exempt from filing a BOI report with the FinCEN.
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© 2025 Richard McDonough
