The Beneficial Ownership Reporting Requirements of the Corporate Transparency Act Comes to an End ... or Does It?

On August 11, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued a final rule that permanently removes the beneficial ownership information reporting requirement for U.S. companies and U.S. persons under the Corporate Transparency Act. FinCEN also announced that it will delete previously reported information concerning U.S. persons from its database. The rule makes permanent the core exemptions first introduced in the March 2025 interim final rule and leaves remaining obligations focused primarily on certain foreign entities registered to do business in the United States. For the many Texas entities and U.S. persons who have followed this issue closely, the development offers real and immediate relief, yet the underlying statute remains in place and continues to shape the longer-term picture.

Congress enacted the Corporate Transparency Act as part of the National Defense Authorization Act for Fiscal Year 2021. The law took effect on January 1, 2021, after Congress overrode a presidential veto, and directed FinCEN to collect identifying information on the beneficial owners and company applicants of a wide range of corporations, limited liability companies, and similar entities. FinCEN published its principal implementing regulations in September 2022, with an effective date of January 1, 2024. Existing entities were generally given until early 2025 to file initial reports, while newly formed entities faced shorter deadlines. Those deadlines, however, shifted repeatedly as constitutional challenges moved through the federal courts. Lawsuits in Alabama, Texas, and elsewhere produced a series of injunctions, stays, and conflicting decisions on whether the Act fell within Congress’s enumerated powers. The resulting uncertainty left many businesses and their counsel in a prolonged state of flux regarding whether, when, and how to comply.

In March 2025 the Treasury Department announced that it would not enforce penalties against U.S. citizens or domestic reporting companies and their beneficial owners. FinCEN followed shortly thereafter with an interim final rule that revised the regulatory definition of “reporting company” to cover only entities formed under foreign law and registered to do business in a U.S. state or Tribal jurisdiction. Domestic entities were expressly exempted, and foreign reporting companies were relieved of any obligation to report U.S. persons as beneficial owners. The August 11, 2026 final rule adopts those changes on a permanent basis, expands limited additional relief for U.S. person company applicants and holders of FinCEN identifiers, and confirms the planned deletion of U.S.-person data.

The statute itself is broader than the current regulations. Under 31 U.S.C. § 5336, a “reporting company” includes any corporation, limited liability company, or similar entity created by filing a document with a secretary of state or comparable office under state or Tribal law, as well as foreign-formed entities registered to do business in the United States by a similar filing. Texas entities formed through the Secretary of State fall squarely within the statutory definition. The Act requires reporting companies to identify beneficial owners—those who exercise substantial control or own or control at least 25 percent of the ownership interests—and company applicants, and to provide specified personal information for each. The statute contains a detailed list of specific exemptions and, importantly, authorizes the Secretary of the Treasury, with the written concurrence of the Attorney General and the Secretary of Homeland Security, to exempt additional entities or classes of entities by regulation when the Secretary determines that requiring the information would neither serve the public interest nor be highly useful for national security, intelligence, or law enforcement purposes. Reporting is to occur “in accordance with regulations prescribed by the Secretary.” The current final rule rests on that exemption authority.

Because the statute remains in force, a future administration could seek to restore broader reporting requirements through new rulemaking. A future Secretary could rescind or narrow the present exemptions after making different findings under the statutory criteria, or issue revised regulations that more closely track the statute’s definition of reporting company. Any such change would be governed by the Administrative Procedure Act and would face judicial review under the standard established in Loper Bright Enterprises v. Raimondo, which requires courts to determine the best reading of the statute rather than defer to the agency’s interpretation. Restoration of broader requirements is therefore possible, but it is neither automatic nor free of procedural and substantive constraints.

Penalties for non-compliance during the period of the current exemptions are unlikely to apply retroactively. The statute ties the reporting obligation to regulations issued by the Secretary, and both civil and criminal penalties require a willful violation of a known legal duty. While domestic entities and U.S. persons were exempt under the interim final rule and the new final rule, no such duty existed. A subsequent rule restoring reporting would ordinarily operate prospectively. Constitutional limits on ex post facto laws and due-process principles reinforce that conclusion for pure failure-to-report conduct occurring while the exemptions were in effect.

For domestic entities formed under Texas law and for U.S. persons associated with them, the practical result is that there is presently no obligation to file initial beneficial ownership reports, to update or correct prior filings, or to maintain FinCEN identifiers for purposes of the Corporate Transparency Act. New formations and existing entities may proceed without those filings. At the same time, the statutory framework continues to define domestic entities as reporting companies and contemplates the reporting of U.S.-person information, subject to the listed exemptions and the Secretary’s regulatory authority. Clients and counsel should regard the current relief as operative while remaining attentive to the possibility of future regulatory change.

This overview is provided for general informational purposes and does not constitute legal advice. The application of these rules to any particular entity depends on its specific facts and on any subsequent developments. Foster Massengill, PLLC continues to monitor these issues and is available to discuss how the final rule and the underlying statute affect individual clients and their entities.

U.S. Department of the Treasury press release (August 11, 2026): https://home.treasury.gov/news/press-releases/sb0603

‍Corporate Transparency Act (31 U.S.C. § 5336): https://www.law.cornell.edu/uscode/text/31/5336‍

FinCEN Final Rule (Beneficial Ownership Information Reporting Requirement Revision): https://www.fincen.gov/system/files/2026-08/BOIFinalRuleforFR.pdf