The US Treasury Department announced on Sunday that it will not enforce the penalties or fines associated with the Biden administration’s “beneficial ownership information,” or BOI, reporting requirements for millions of domestic businesses.
BOI reporting, enacted by the Corporate Transparency Act in 2021 to combat illicit finance and shell company formation, requires small businesses to identify who directly or indirectly owns or controls the company to the Treasury’s Financial Crimes Enforcement Network, or FinCEN.
After previous court delays, the Treasury issued a deadline of March 21 to comply or face civil penalties of up to $591 per day, adjusted for inflation, or criminal fines of up to $10,000 and up to two years in prison. According to federal estimates, the reporting requirements may affect approximately 32.6 million businesses.
The rule was enacted to “make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures,” according to FinCEN.
In addition to not enforcing BOI penalties and fines, the Treasury stated that it would issue a proposed regulation limiting the rule to foreign reporting companies.
President Donald Trump praised the news in a Truth Social post on Sunday night, calling the reporting rule “outrageous and invasive” and “an absolute disaster” for small businesses.
Other experts believe the Treasury’s decision may have ramifications for national security.
“This decision threatens to make the United States a magnet for foreign criminals, from drug cartels to fraudsters to terrorist organizations,” said Scott Greytak, director of advocacy at Transparency International U.S.
