The Corporate Transparency Act in 2026: What Changed, What Still Applies, and Where Vendor Compliance Goes From Here
The Corporate Transparency Act's beneficial ownership reporting requirement — the rule that required millions of U.S. businesses to disclose their owners to FinCEN — was effectively suspended for domestic companies in March 2025. If your team spent time preparing for BOI reporting, that work is on hold for now. But the compliance infrastructure question the CTA raised — how do you verify the identity and legitimacy of the businesses and individuals you work with? — hasn't gone away. It's just being answered through different mechanisms for most U.S. companies.
What the Corporate Transparency Act Was Designed to Do
The Corporate Transparency Act (CTA), enacted January 1, 2021, was Congress's attempt to close a long-standing gap in U.S. anti-money laundering law: the ease with which shell companies could be formed in the United States without any public disclosure of who actually owned or controlled them.
Under the CTA's original implementing rules, most U.S. corporations, LLCs, and similar entities were required to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. The report identified individuals who owned 25% or more of the entity or exercised substantial control over it — names, addresses, dates of birth, and government-issued ID numbers.
The original deadlines: entities formed before January 1, 2024 had until January 1, 2025 to file. Entities formed in 2024 had 90 days from formation. Entities formed in 2025 or later had 30 days.
The Legal and Regulatory Saga: 2024-2026
What followed was one of the more unusual sequences in recent U.S. regulatory history.
In late 2024, multiple federal courts issued injunctions blocking enforcement of the BOI reporting requirement, creating a period of uncertainty about whether filing was required at all. The injunctions were stayed, reinstated, and appealed in rapid succession across different circuits.
In December 2025, the Eleventh Circuit Court of Appeals resolved the constitutional question — holding that the CTA is a valid exercise of Congress's Commerce Clause authority and does not violate the Fourth Amendment. The statute is constitutional.
But the administrative picture had already shifted separately. In March 2025, FinCEN issued an interim final rule that — regardless of the constitutional litigation — substantially narrowed the scope of BOI reporting by rule:
- All U.S.-formed entities are exempt. Every corporation, LLC, limited partnership, and other entity formed under the laws of a U.S. state or tribal jurisdiction is exempt from BOI reporting requirements under the interim final rule. No initial report, update, or correction is required.
- Foreign reporting companies still have obligations. Entities formed under the laws of a foreign country and registered to do business in a U.S. state must still file. Foreign reporting companies registered before March 26, 2025 had until April 25, 2025. Those registered on or after March 26, 2025 have 30 calendar days from the effective date of their registration.
- U.S. persons are not reportable as beneficial owners of foreign companies. Foreign reporting companies must identify and report non-U.S. beneficial owners — but they are not required to report U.S. persons who meet the beneficial ownership criteria.
- FinCEN intends to finalize the interim rule. As of this writing, the interim final rule remains in effect and FinCEN has signaled it will be finalized. The landscape remains subject to change through congressional action, further litigation, or administrative rulemaking.
What Still Applies: State-Level Requirements
The federal exemption doesn't preempt state law. Several states have enacted or are developing their own transparency requirements that operate independently of the federal CTA:
New York LLC Transparency Act — New York enacted its own beneficial ownership disclosure law for LLCs operating in the state. Entities subject to the New York law should consult current guidance on filing obligations and deadlines, as state requirements continue regardless of the federal exemption.
Other states have introduced similar legislation. Organizations operating across multiple states should verify current requirements in each jurisdiction.
What This Means for AP and Compliance Teams
For most U.S.-based AP and compliance teams, the practical consequence of the March 2025 interim rule is that BOI filing preparation for your own entity is on hold. The work done to map beneficial ownership structures, gather ID documentation, and evaluate which personnel qualify as beneficial owners under the 25% / substantial control tests isn't wasted — it may be needed when the final rule is issued, or for state-level requirements — but it doesn't have an active federal deadline right now.
What that work revealed, though, is worth keeping: the underlying question of who actually owns and controls the companies you do business with remains relevant to vendor due diligence, even without a federal mandate to report it to FinCEN. The CTA's logic — that shell company opacity creates financial crime risk — applies equally to your vendor relationships.
The Vendor Compliance Parallel
The controls that would have made CTA compliance straightforward are the same controls that support rigorous vendor onboarding: verifying legal entity names, validating tax identification numbers, and screening against sanctions and watchlists.
Entity name verification — knowing that the vendor's legal name matches its registered EIN is the foundation of both TIN compliance and beneficial ownership accuracy. A vendor who provides a DBA name instead of its legal name creates a TIN mismatch problem and obscures the entity's actual legal identity.
TIN validation — verifying that a vendor's name and EIN match IRS records before the first payment is made catches identity errors early, when they're inexpensive to resolve. The same validation that prevents CP2100 notices and 972CG penalties also confirms you have the right legal entity on file.
Sanctions screening — OFAC's SDN list and the 250+ other global watchlists that TIN Comply screens against are exactly the kind of controls relevant to the beneficial ownership risk the CTA was designed to address. A vendor entity may clear TIN matching and still have a sanctioned beneficial owner. Running OFAC screening at onboarding and on an ongoing basis is the operational implementation of the concern behind the CTA.
Documentation and audit trails — whether for a 972CG reasonable cause defense, an IRS audit, or a future regulatory inquiry, the ability to demonstrate that you verified vendor identity at onboarding, flagged and resolved issues, and maintained records of the process is what makes a compliance program defensible.
None of this depends on whether the CTA's final rule requires BOI reporting. These are practices that reduce IRS penalty exposure, OFAC enforcement risk, and vendor fraud risk independently.
The CTA Is Not Done
The current exemption for domestic companies is an interim rule, not a permanent repeal. FinCEN has indicated it intends to issue a final rule. Congressional action could expand or narrow the scope in either direction. State-level requirements continue to develop independently.
Organizations that suspended CTA preparation entirely should maintain their beneficial ownership mapping work and monitor FinCEN and Treasury announcements. The administrative infrastructure for BOI compliance — the ability to identify beneficial owners, collect their information, and verify it — is worth preserving even while the federal deadline is suspended.
FinCEN's BOI E-Filing system (boiefiling.fincen.gov) remains available. Foreign reporting companies should verify their current filing obligations and deadlines directly on FinCEN's website, as guidance continues to be updated.
Summary: Current CTA Status
| Entity Type | BOI Reporting Requirement |
|---|---|
| U.S.-formed entities (corporations, LLCs, LPs, etc.) | Exempt under March 2025 interim final rule |
| Foreign entities registered to do business in U.S. before March 26, 2025 | Filed by April 25, 2025 |
| Foreign entities registered to do business in U.S. on or after March 26, 2025 | File within 30 days of registration effective date |
| U.S. persons as beneficial owners of foreign companies | Not reportable under interim final rule |
| State-level requirements (e.g., NY LLC Transparency Act) | Apply independently - verify per jurisdiction |
Where to Focus Now
For AP and compliance teams whose primary exposure is 1099 information reporting rather than CTA/BOI compliance, the near-term priorities are clearer: TIN validation, W-9 collection, sanctions screening, B-Notice management, and 972CG penalty response. These have active IRS enforcement, established penalty tiers, and documented remediation workflows.
For teams with significant vendor populations, a vendor master cleanup — validating TINs, confirming legal names, refreshing stale W-9s, and running OFAC screening — addresses both the IRS compliance exposure and the vendor identity due diligence that the CTA was designed to address from the regulatory side.
- IRS TIN Matching: How It Works and Why It Matters
- OFAC Sanctions Screening: What Non-Financial Companies Need to Know
- Vendor Master Cleanup
- W-9 Collection and Management
- IRS CP2100 and B-Notices: Complete Response Workflow
This article is for informational purposes only and does not constitute legal advice. The regulatory status of the Corporate Transparency Act and BOI reporting requirements continues to evolve. Consult a qualified attorney or compliance professional for guidance specific to your organization, and verify current requirements directly at FinCEN.gov.