Corporate Transparency Act — Where Are We Now (2026)?
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We’ve been following developments in the Corporate Transparency Act (CTA) since it became law on January 1, 2021. Regulatory changes in March 2025 gave additional clarity and significantly reduced the reporting obligations for many entities initially subject to the CTA. Since then, the CTA has survived constitutional challenges. As a result, the statute remains valid, and the Financial Crimes Enforcement Network’s (FinCEN’s) interim final rule exempting domestic entities remains in effect.
Summary of Where We Are Today (2026):
Domestic U.S. entities: There is no Beneficial Ownership Information (BOI) reporting required.
U.S. person: There is no reporting obligation.
Foreign entities: BOI reporting is still required.
Foreign entities must file BOI reports within 30 days of registration, or
Update/correct reports within 30 days of a change
Foreign entities do not report U.S. persons as beneficial owner
The CTA has survived constitutional challenges. However, future expansion still remains possible.
Recent CTA Developments
FinCEN interim final rule
In March 2025, FinCEN issued an interim final rule that revised the definition of “reporting company” to mean only those entities known as “foreign reporting companies.” FinCEN exempted from reporting requirements entities previously known as “domestic reporting companies.” In addition, the rule exempted foreign reporting companies from having to report the BOI of any U.S. persons who were beneficial owners of the foreign reporting company. U.S. persons were also exempted from having to provide such information to any foreign reporting company of which they were a beneficial owner.
Since then, FinCEN suspended enforcement of the CTA, announcing it would develop new regulations that would reduce “regulatory burden.” The bureau said it would prioritize “reporting of BOI for those entities that posed the most significant law enforcement and national security risks.”
A final rule was not issued late in 2025. As of early 2026, FinCEN has not yet finalized the interim rule. The interim rule remains in effect. However, FinCEN has publicly confirmed it is still reviewing comments and has not announced a definitive timeline for final rulemaking.
CTA enforcement suspended for U.S. entities
Also in March 2025, the U.S. Department of the Treasury announced that it would not enforce fines and penalties for CTA against domestic entities. As we entered into 2026, FinCEN has continued their non-enforcement posture for domestic entities and U.S. persons. No civil or criminal penalties are being assessed against U.S.- formed entities for failure to file BOI reports. Enforcement still continues only for foreign entities that meet the revised definition of “reporting company.”
FinCEN has consistently emphasized that the CTA remains federal law, and enforcement priorities could change through future rulemaking.
History of the Corporate Transparency Act
Congress enacted the CTA as part of the broader Anti-Money Laundering Act of 2020. The CTA mandated that millions of entities in the U.S. report their BOI to the Treasury Department’s FinCEN. There were several exemptions from the requirements of the CTA. The initial act required millions of small companies, people with estate plans, and property owners to report personal information to FinCEN by 2025. Those subject to the CTA filing requirement would have to disclose personal information, including home addresses, birthdates, a copy of passports, driver’s licenses, or other identifying documents from an issuing jurisdiction. This confidential information required by the CTA went well beyond what typically was reported on income tax returns. There was also concern about who would have access to the data that FinCEN collected.
The CTA was scheduled to take effect January 1, 2024, with initial reports not due until January 1, 2025, for reporting entities that existed before January 1, 2024. Domestic and foreign companies that were created or registered to do business in the U.S. in 2024 were required to file within 90 days after receiving actual or public notice, whichever was earlier, of their creation or registration. Starting January 1, 2025, all reporting companies created or registered after that date were required to file their initial reports within 30 days. Noncompliance could have resulted in civil and criminal penalties. Many filings took place, some required and some voluntarily filed. Legal challenges rolled back the January 1, 2025, deadline several times.
CTA upheld as constitutional by the eleventh circuit court
On December 16, 2025, the U.S. Court of Appeals for the Eleventh Circuit reversed a district court decision and held that the CTA is a constitutional exercise of Congress’s authority, rejecting Commerce Clause and Fourth Amendment challenges. This decision resolved one of the most significant constitutional threats to the statute itself. This means that the CTA is now on firmer legal footing at the appellate level. Importantly, the decision does not reinstate BOI reporting for domestic U.S. entities, because FinCEN’s March 2025 interim final rule remains in effect. However, it reduces the likelihood that the CTA will be invalidated entirely, increasing the risk that future administrations could re-expand reporting obligations via regulation.
What to Do Now?
Foreign entities should continue to fully comply with BOI reporting. Domestic entities do not need to file BOI reports.
While reporting obligations are currently limited, the CTA’s future scope will depend on FinCEN’s final rulemaking and potential administrative or legislative shifts.
Although most U.S.-formed entities remain exempt from BOI reporting, the CTA remains valid federal law. Businesses may wish to preserve beneficial ownership information to allow for rapid compliance should reporting requirements expand in the future.
Definitions Under FinCEN Interim Rule
Foreign vs. domestic entities
A foreign entity is defined as any corporation, limited liability company, or other entity formed under the law of a foreign country and legally registered to do business in any U.S. state or tribal jurisdiction.
A domestic entity is defined as any corporation, limited liability company, or other entity legally created in any U.S. state or tribal jurisdiction.
Note that this does not include trusts, since they are not entities created through the process of filing with a state’s Secretary of State.
U.S. person
The new interim rule does not distinguish the term U.S. persons from foreign persons. Treasury most likely intended its meaning to align with the definition of “United States person” under the Internal Revenue Code. The Internal Revenue Code defines a “U.S. person” as being one of the following:
A citizen or resident of the United States
A domestic partnership
A domestic corporation
Any estate (other than a foreign estate).
Any trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust.
For more information, please contact your advisor.
About Tina A. Myers
In her role, Tina is responsible for managing the Central Planning Team and overseeing the Key Wealth Institute and any financial planning content distributed. She works with our Key Private Client Directors of Planning & Investments and our Key Private Bank Directors of Wealth & Estate Planning to help facilitate our best thinking and advice delivery to clients.
Before joining Key, Tina worked in the public accounting industry, where she focused on taxes, specifically individual, trust, estate, and gift tax planning. She also held roles at a small public accounting firm, a regional firm, and the private client group of a large multinational firm.
Tina holds a Bachelor of Science in Business Administration from the University of Richmond and earned her M.Tax from Virginia Commonwealth University. She holds her CPA license with a Personal Financial Specialist (PFS®) designation, Certified Financial Planner (CFP®) designation and Accredited Estate Planner® designation. She received the Circle of Excellence Award for Key Private Bank in 2016 and 2018. She was selected to attend the 2024 Key Wealth Education Symposium, which recognizes top performance and extraordinary commitment to serving our clients and growing our business.