The Small Business and Entrepreneurship Council (SBE Council) says the suspension of the Corporate Transparency Act (CTA) Beneficial Ownership Information (BOI) mandate is a massive win for smaller firms.
The CTA was aggressively pursued during the Biden Adminstration, placing an unrealistic burden on smaller firms.
Yesterday, Secretary of the Treasury Scott Bessent announced that the CTA would NOT be enforced, and no penalties would be assessed regarding beneficial ownership information, effectively killing the punitive rule. The Treasury noted that it intends to pursue rulemaking to relegate the CTA to a narrow scope for foreign reporting companies.
“This is a victory for common sense,” said Bessent. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy.”
Under the CTA, it was anticipated that million of companies would need to disclose owners to the Financial Crimes Enforcement Network (FinCEN), part of the Department of Treasury. The obtuse rules concocted during the Biden Administration launched lawsuits challenging the overreach at Treasury. Former Secretary of the Treasury Janet Yellen had claimed it was a move to root out illicit activity but this ignored the burden foisted upon smaller firms – that and the fact criminals would simply ignore the rule.
Karen Kerrigan, SBE Council President & CEO, commented on the Treasury’s decision:
“This is a massive win – and massive relief – for America’s small businesses. As we stated all along, this make-work scheme is intrusive and likely unconstitutional. Law enforcement has ample and sophisticated tools to identify bad actors, so this scheme to collect troves of information from more than 30 million small businesses made no sense. SBE Council is very grateful to President Trump and Secretary Bessent for not only listening to small business concerns, but rapidly responding to them by lifting the burdens, fears and confusion the CTA-BOI was fueling.”
SBE Council stated that it will continue to advocate for the full repeal of the underlying CTA statute via the “Repealing Big Brother Overreach Act.” This would also remove the need to continue litigation challenging the CTA.