The Supreme Court ruled in January that small businesses were required to file Business Ownership Information (BOI) with the government under laws created by the Corporate Transparency Act.
Sunday, the Treasury Department said the businesses need not comply with the legislation or the court ruling.
The Treasury Department said it would not enforce any penalties or fines associated with the BOI reporting rule. Additionally, the agency will not enforce any penalties or fines against U.S. citizens or domestic reporting companies after upcoming rule changes take effect.
“Treasury takes this step,” the agency said, “in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”
The agency said it would propose rulemaking to narrow the BOI rule to require only foreign companies to report. Treasury Secretary Scott Bessent said the changes were a victory for common sense.
“Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations,” Bessent said, “in particular for small businesses that are the backbone of the American economy.”
Under the 2021 CTA law, over 30 million small businesses were required to file information about their ownership by Jan. 1, 2025. The CTA was created to help the Financial Crimes Enforcement Network and the Treasury Department fight money laundering by identifying illicit shell companies. Companies with 20 or fewer full-time employees whose annual gross receipts total less than $5 million are subject to the BOI rules.
