U.S. Senators Want Treasury Department To Enforce Corporate Transparency Act

As Connecting the Dots reported earlier this month, the U.S. Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN) have suspended enforcement of the Corporate Transparency Act (CTA), which would have required small businesses that met certain criteria to file ownership reports with FinCEN or risk fines and criminal penalties.

The Metals Service Center Institute (MSCI) and allies have argued this rule would impose significant, costly new requirements on small businesses without meeting the CTA’s stated goal to reduce money laundering and corporate corruption.

Lawmakers on Capitol Hill are pushing back against the Treasury Department’s decision to suspend enforcement. On March 10, Sen. Charles Grassley (R-Iowa) and Sen. Sheldon Whitehouse (D-R.I.) sent a letter to Treasury Secretary Scott Bessent requesting an explanation for the department’s decision. “We request that you provide us the legal basis for the Treasury Department’s policy decision to categorically suspend enforcement of the CTA’s reporting requirements for all U.S. citizens and domestic reporting companies,” the letter, which is available at this link, said. “In addition, we request that you provide us with information about how you intend to satisfy the policy goals of the CTA.”

While the letter clearly urges the Treasury Department to rethink its decision, the good news is that it also confirms that the Treasury Department does, in fact, have the authority to exempt companies from the CTA — something MSCI, the S-Corp Association, and other organizations that oppose the CTA have argued repeatedly.

MSCI does not expect the Treasury Department to reconsider its current stance, but asks members to please stay tuned to Connecting the Dots  for any change in the enforcement status of the CTA.