Federal Court Halts Enforcement of Small Business Ownership Reporting Rule

A nationwide injunction blocks the Treasury Department's penalties for noncompliance, though the filing deadline remains in place.

The Corporate Transparency Act requires small businesses to report beneficial ownership information to the Treasury Department's Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.
Noncompliance could result in fines of up to $10,000, daily civil penalties of $591, and up to two years in prison, though penalties target willful violations.
A federal judge in Texas issued a temporary nationwide injunction on December 3, pausing enforcement while the rule's constitutionality is reviewed.
The Treasury Department plans to appeal the decision, leaving the rule's future enforcement uncertain, though the reporting deadline remains unchanged.
Critics argue the rule imposes significant costs, invades privacy, and exceeds federal authority, while supporters claim it combats illicit financial activities.