The Treasury Department has cancelled its deadline of March 21 for millions of businesses to fulfill a new reporting requirement on “beneficial ownership information,” after a court order allowed the federal agency to start enforcing the measure.  It was too evasive and unconstitutional.

     The Corporate Transparency Act, which Congress enacted in 2021, required small businesses to disclose the identity of people who directly or indirectly own or control the company. The measure aims to prevent criminals from hiding illicit activity conducted through shell companies or opaque ownership structures, according to the Treasury.

     Businesses have suffered a degree of whiplash from the on-again-off-again deadlines to file BOI reports. A string of court orders had prevented the Treasury from enforcing the measure, only to then see courts strike down those rulings.  The U.S. District Court for the Eastern District of Texas on Feb. 18 lifted a nationwide injunction that had prevented the Financial Crimes Enforcement Network, known as FinCEN, which is part of the Treasury, from enforcing the Corporate Transparency Act.  The BOI reporting measure applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

     Businesses and owners that did not comply with reporting rules were potentially subject to civil penalties of up to $591 a day, adjusted for inflation. They could have also face up to $10,000 in criminal fines and up to two years in prison.