On August 14, the Treasury Department released a final rule that exempts U.S. companies and individuals from having to report beneficial ownership information (BOI) required by the Corporate Transparency Act (CTA).
According to the Financial Crimes Enforcement Network’s (FinCEN’s) summary of the rule, “In particular, this final rule not only continues to exempt reporting companies from having to report the BOI of U.S. person beneficial owners from having to provide BOI to reporting companies; it also exempts reporting companies from having to submit information about their U.S. person company applicants to FinCEN and exempts U.S. person company applicants from any obligation to provide their information. In addition, the final rule exempts all U.S. persons from the requirement to update information already provided to FinCEN in connection with obtaining a FinCEN identifier (FinCEN ID).”
In addition, FinCEN committed to permanently deleting sensitive personal data previously collected prior to this exemption of the BOI reporting requirements.
This final rule settles the controversy over the need to report BOI by domestic companies. It comes after an interim final rule issued in March of last year, and after considerable litigation over the first reporting rule, issued by FinCEN (an agency within the Treasury Department) in September of 2022.
The BOI reporting requirements were part of the CTA’s target of eliminating money laundering, terrorism financing, tax fraud and other crimes. The CTA authorized Treasury to issue exemptions to the BOI reporting rules.
Prospects: Prior to the interim final rule suspension of BOI reporting requirements, there were fears that many clients of NAIFA members would be subject to the BOI reporting requirements as outlined in the 2022 proposed rule. So, finalization of the interim final rule is a big win for NAIFA members and their clients.
NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org