The Financial Crimes Enforcement Network (FinCEN) published an interim final rule (“Rule”) in the Federal Register on March 26, 2025 (Federal Register :: Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension), that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA). As you may recall, this comes on the heels of the Department of Treasury’s (“Treasury”) announcement on March 2, 2025, that it will not enforce any penalties or fines associated with the beneficial ownership information reporting rule under what had been the existing regulatory deadlines, nor will it enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.

The FinCEN BOI reporting rule changes 2025 revises the regulatory definition of “reporting company” to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office. In addition, the Rule exempts foreign reporting companies from having to report the BOI of any U.S. persons who are beneficial owners of the foreign reporting company and exempts U.S. persons from having to provide such information to any foreign reporting company for which they are a beneficial owner.

For firms that have foreign entity clients, it is important to note that under the Rule, foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must file a BOI report with FinCEN in accordance with the following deadlines:

• Foreign entity reporting companies registered to do business in the U.S. before March 26, 2025, must file on or before April 25, 2025.

• Foreign entity reporting companies registered to do business in the U.S. on or after March 26, 2025, have thirty (30) calendar days from the date they receive notice that their registration is effective to file an initial BOI report.

As a reminder, updated BOI reports are due within 30 calendar days after a change occurs. Corrected BOI reports are due within 30 calendar days after the reporting company becomes aware of, or has reason to know of, an inaccuracy.

Foreign entity reporting companies that fail to comply with the CTA’s reporting requirements may face significant penalties including civil penalties up to $606 per day for each day the violation continues, as well as criminal penalties up to $10,000 and/or imprisonment for up to two years for willful violations.

Refer to FinCEN’s Questions and Answers document for additional information on the Rule: Interim Final Rule: Questions and Answers | FinCEN.gov.

Risk Management Considerations

After the tumultuous roller-coaster ride of the past months, FinCEN’s issuance of its Rule, which significantly narrows the definition of a “reporting company,” is welcome relief, and CAMICO encourages CPA firms to apprise clients of this latest development. CAMICO offers a client notification template for this purpose.

The client notification template can be found on the CAMICO Members-Only Site (www.camico.com) in the Alert section of the home page and in the Corporate Transparency Act/Beneficial Owner Information Reporting section of the Engagement Letter Resource Center.

As it relates to engagement letter modifications, firms that had included disclaimer language in engagement letters clarifying the firm’s responsibilities regarding CTA compliance under the terms of that agreement can now eliminate that disclaimer clause for most clients. However, if the firm provides services to foreign entity clients, it is extremely prudent to continue to include language that specifically disclaims the firm’s involvement in assisting those foreign entity clients with CTA compliance under the terms of that agreement, as any such CTA-related services that a firm deems appropriate to perform should be covered under a separate stand-alone CTA engagement letter. CAMICO will be updating its engagement letter templates to reflect this change.

See CAMICO’s suggested disclaimer language below:

If you have an entity that was formed under the law of a foreign country and has registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office, the Corporate Transparency Act (“CTA”) may require you to report information about the foreign entity’s beneficial owners — the individuals who ultimately own or control the company — to the Financial Crimes Enforcement Network (“FinCEN”) if the entity meets the definition of a “reporting company” and does not qualify for an exemption from the reporting requirements. Management is responsible for [Client]’s compliance with the CTA, if applicable, and for ensuring that any required reporting of beneficial ownership information (including the initial filing and any required ongoing updates and/or corrected reports that may be necessary) is timely filed with FinCEN as required by the CTA. Our firm’s services under the terms of this agreement do NOT include any advising, consulting, or submission of any required reporting related to your entity’s compliance with the CTA.
>[If you need assistance with any required CTA reporting and/or have any questions regarding [Client]’s compliance with the CTA, including but not limited to whether an exemption may apply to your organization or to ascertain whether relationships constitute beneficial ownership under CTA rules, we strongly encourage you to consult with qualified legal counsel experienced in this area.] OR [If you need assistance with any required CTA reporting and/or have any questions regarding [Client]’s compliance with the CTA, including but not limited to whether an exemption may apply to your organization or to ascertain whether relationships constitute beneficial ownership under CTA rules, please contact us. Any CTA-related services we agree to perform will be covered under a separate engagement letter.]

Keep in mind that the CTA/BOI saga is not completely over. FinCEN is accepting comments on its Rule until May 27, 2025, so more changes could be forthcoming. In addition, the CTA/BOI rules still face ongoing legal challenges so remain vigilant and continue to monitor future developments.

For additional information regarding the beneficial ownership reporting requirements under the CTA, refer to FinCEN’s Frequently Asked Questions document at https://www.fincen.gov/boi-faqs.

As always, please reach out to us if you have any questions. 

Sincerely,
PDR CPAs + Advisors