The U.S. Treasury Department announced on Sunday that it will not enforce penalties under the Corporate Transparency Act, a law requiring millions of businesses to disclose their true owners. The decision follows ongoing legal challenges and concerns that the law imposes excessive burdens on small businesses.
The Corporate Transparency Act, introduced during the Biden administration, aims to curb financial crimes by increasing transparency in business ownership. However, the Trump administration has criticized the law, arguing that it places unnecessary regulatory pressure on low-risk entities.
In a statement, the Treasury Department clarified that it will not impose penalties on U.S. citizens or domestic businesses for noncompliance.
“This step supports hard-working American taxpayers and small businesses,” the department stated, adding that it plans to narrow the law’s scope to primarily target foreign entities.
The law’s supporters argue that stricter disclosure rules help prevent criminals from laundering illicit funds through anonymous business structures. Critics, however, contend that the law creates unnecessary compliance hurdles for legitimate companies.
As the Treasury Department prepares to revise the regulations, business groups and financial watchdogs are closely monitoring the potential impact of these changes.
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