On Jan. 20, ABC joined more than 100 trade associations in a letter urging the U.S. Department of the Treasury to immediately purge the Corporate Transparency Act database of beneficial ownership information submitted by domestic businesses that are no longer required to report.

On Feb. 27, 2025, Treasury announced that it was ceasing enforcement of the CTA while it crafted a new set of regulations and on March 21, 2025, FinCEN announced it is issuing an interim final rule that removes the BOI reporting requirements under the CTA for U.S. companies and persons.

While the administration appropriately narrowed the CTA’s scope last year to apply only to foreign entities, relieving more than 32 million U.S. businesses of these requirements, millions of law-abiding domestic companies had already complied. Their sensitive personal data remains stored by FinCEN, creating ongoing cybersecurity and privacy risks despite serving no legitimate government purpose.

The legal uncertainty surrounding the CTA heightens the need for swift action. In fact, 12 federal lawsuits are challenging the law’s constitutionality. Members of Congress and Treasury officials have acknowledged the need to dispose of data no longer legally required, but Main Street businesses deserve certainty and a clear timeline, not indefinite storage of personal information. ABC joined partners in calling on the Treasury to finalize the rule exempting U.S. businesses and to promptly destroy collected data to protect small business owners’ privacy.

While U.S. companies have been alleviated of the need to file, this relief is only temporary. So long as the CTA statute remains in place, a future administration could rewrite the rules to be more expansive. For this reason, ABC strongly supports H.R. 425, the Repealing Big Brother Overreach Act, which would repeal the CTA and relieve small business owners from these burdensome reporting requirements and criminal penalties.

Read more on the S-Corporation Association of America’s website.

Background:

On Jan. 1, 2021, Congress enacted into law the CTA, which establishes a new framework for the reporting, maintenance and disclosure of beneficial ownership information in order to better enable national security, intelligence and law enforcement efforts to counter money laundering, the financing of terrorism and other illicit activity.

ABC, along with a coalition of small business organizations, submitted a letter to congressional leaders expressing concerns about the amendments incorporating the CTA into the 2021 National Defense Authorization Act, stating the enactment of the CTA would decrease privacy protections and slow the economic recovery of Main Street businesses.

ABC responded to Treasury’s FinCEN notice of proposed rulemaking seeking public input on how best to implement the reporting requirements of the CTA, as well as the CTA’s provisions regarding FinCEN’s maintenance and disclosure of reported information in comments.

ABC’s comments noted that the framework prescribed by the CTA will require millions of small businesses, including nearly every employer with 20 or fewer employees, to report to FinCEN certain personal information of their beneficial owners and update that information periodically throughout the life of the business.

ABC also argued that America’s small businesses—which make up most of ABC’s members—are typically not staffed or equipped to understand and comply with reporting obligations similar to those under the CTA. However, per the CTA, failure to comply can result in significant fines and imprisonment for these small business owners.