Treasury Department halts enforcement of BOI requirements: What to know

WASHINGTON - The U.S. Treasury Department announced on Sunday that it was suspending enforcement of the Beneficial Ownership Information (BOI) reporting requirement for U.S. citizens and domestic companies.

In response, President Donald Trump praised the move on Truth Social as a win for U.S. businesses. Here’s what to know:

What is BOI reporting?

What we know:

The Biden-era initiative says companies may be required to report certain information on their beneficial owners to the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). It’s part of the Corporate Transparency Act, an anti-money laundering statute passed in 2021. 

FILE - A photo shows the US Treasury in Washington, D.C. on Feb. 6, 2025. (Photo by MANDEL NGAN/AFP via Getty Images)

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Dig deeper:

Under the rule, a "beneficial owner" includes any individual who – directly or indirectly – either "exercises substantial control over a reporting company," or "owns or controls at least 25 percent of the ownership interests of a reporting company." 

When filing BOI reports with FinCEN, the rule requires the owners and part-owners of an estimated 32.6 million small businesses to register personal information, such as their name, birthdate, and address. 

The aim of the law is to cut down on shell corporations and money laundering. But small business advocates have said the reporting requirements are too burdensome, and it has been opposed by Republican-led states and lawmakers.

Treasury Department suspends enforcement of BOI reporting requirements

Timeline:

The rule has long been in legal limbo. On Sunday, the department announced that penalties or fines associated with BOI would not be enforced, nor would penalties against U.S. citizens or domestic reporting companies or their beneficial owners. Instead, the focus will turn to foreign companies only. 

What they're saying:

U.S. Secretary of the Treasury Scott Bessent called it a "victory for common sense." 

"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," Bessent said in a statement.

The National Small Business Association also issued its own statement, calling BOI reporting "a massive burden."

"While we appreciate the restraint and understanding FinCEN appears to be showing about the massive burden BOI reporting poses for millions of small businesses, we urgently need Congress to intervene and pass legislation that doesn’t harm small businesses, and actually fixes the problem of money-laundering; both sides of the coin on which CTA is a complete failure," National Small Business Association President and CEO Todd McCracken said.

Trump, for his part, called the requirement "outrageous and invasive."

The other side:

Democrats and progressive organizations in support of the law have argued that disclosure of beneficial ownership information helps law enforcement combat money laundering, terrorist financing and other misconduct through business entities.