FinCEN ends beneficial ownership reporting

The Treasury Department's Financial Crimes Enforcement Network issued a final rule permanently removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the Corporate Transparency Act.  

FinCEN also announced it would delete previously reported information by U.S. persons — now exempt from the reporting requirements — from the beneficial ownership information database. 

The Treasury drastically limited the requirement at least for U.S.-based companies, by issuing an interim final rule in March of last year that suspended enforcement, fines and penalties against domestic businesses after a series of court rulings. Companies had pushed for the existing information to be deleted for the companies that had reported.

"Today's action is a victory for common sense and American small businesses," said Treasury Secretary Scott Bessent in a statement Tuesday. "President Trump promised to cut red tape, and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security."

The CTA was signed into law as part of the National Defense Authorization Act of 2021 and requires individuals with an ownership interest in a limited liability company to disclose personal data to FinCEN as a way to deter illicit activity such as money laundering, tax fraud, drug trafficking and terrorism financing by anonymous shell companies.

However, the requirement provoked a wave of lawsuits and court decisions, along with heavy industry opposition, including from the American Institute of CPAs, which has thrown its support behind legislation to limit the requirement only to foreign companies. Some groups, such as the National Federation of Independent Business, have sought to force FinCEN to delete the existing reports altogether. 

Among other things, the final rule:

• Adopts the exemptions in the interim final rule issued in March 2025, making the rollback of beneficial ownership reporting by U.S. companies permanent;
• Exempts U.S. persons who have obtained FinCEN IDs from any obligation to update or correct the information they originally provided to FinCEN to obtain their FinCEN IDs;
• Eliminates the requirement for foreign companies to report U.S. person "company applicants" (e.g, the individuals who helped those foreign companies register to do business in the United States);
• Exempts foreign pooled investment vehicles registered in the United States from reporting the beneficial ownership information of a U.S person in control of the investment vehicle; and,
• Confirms that FinCEN will delete information about any individuals — company applicants, beneficial owners, or recipients of a FinCEN ID — that FinCEN reasonably believes is a U.S. person (e.g., the information is linked to a U.S. passport or U.S. driver's license).

Under the final rule, foreign entities that are reporting companies will still be required to report beneficial ownership information for foreign individuals. The final rule is effective on its publication in the Federal Register. In addition to the final rule, FinCEN has issued a set of frequently asked questions, and will be updating guidance on FinCEN.gov to reflect the final rule.