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In a surprise announcement Sunday night, the U.S. Treasury Department put out a press release that could save tens of millions of small businesses from being treated like financial criminals and risking jail time and massive financial penalties.
The release, titled, “Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies,” looks to be providing a big win for Main Street.
As I have talked about here before, the Corporate Transparency Act (“CTA”) was vetoed by President Donald Trump in his first administration, but Congress overrode the veto. Then, the Biden administration’s Treasury went into full government overreach mode.
The beneficial ownership information (BOI) reporting requirement of the CTA was forcing small business owners to have to register with the financial crimes division of Treasury (FinCEN) in a guilty-before-being-proven-innocent manner, plus creating egregious penalties for non-filing, late filing, incorrect filing or failure to update a filing.
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The March 2, 2025, Treasury release said:
“The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.
“The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.
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“‘This is a victory for common sense,’ said U.S. Secretary of the Treasury Scott Bessent. ‘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.’”
The way that I and others interpret this, that means that U.S. small businesses and citizens will not have to file the CTA BOI with FinCEN and will not face any penalties. For tens of millions of small and private businesses, as well as housing association board members and others caught up in this mess, this is a big relief.
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It is also a huge, long-fought victory, as the Biden administration had stymied every effort to overturn it.
It is also a great feeling to know that Main Street finally has advocates, including President Trump and Treasury Secretary Bessent, in the administration.
Bessent said during his confirmation hearing, “I think it’s Main Street’s time. Wall Street can continue to do well, maybe not as well, and it’s time to have a Main Street small business-led recovery…” How refreshing it is to have government officials walk the talk.
To ensure permanency (that is, so it doesn’t get put back in place in a future administration), small businesses need for Congress to codify that the CTA BOI rule should only apply to foreign reporting companies, so hopefully everyone will call their representatives and ask them to follow Treasury’s leadership.
But for now, Main Street can count on one barrier broken down and small businesses can focus on thriving.
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