Business reporting mandate delayed, limited to foreign entities
Forthcoming rule will set new deadlines, limit scope
The U.S. Department of the Treasury will not enforce the Corporate Transparency Act (CTA) against domestic businesses, including entities created to hold ownership of aircraft, while the Financial Crimes Enforcement Network (FinCEN), an agency of the Treasury, announced an extension of the current reporting deadline.
The Treasury Department announced on March 2 that it will not enforce any penalties or fines against domestic reporting companies or their beneficial owners even after the new rule changes take effect. Moreover, the department’s new proposal will seek to narrow the scope of the rule to foreign reporting companies only.
The CTA was part of the Anti-Money Laundering Act of 2020 that was enacted as part of the National Defense Authorization Act, which Trump vetoed during his first term. Congress overrode the veto, and the reporting requirements that were scheduled to take effect in 2024 were delayed by litigation.
FinCEN previously announced in February that it would extend the deadline for most businesses to provide beneficial ownership information (BOI), following developments in legal challenges of the CTA.
According to FinCEN’s statement, the BOI reporting was to be extended; the subsequent Treasury Department notice states no deadlines will be enforced until a forthcoming interim final rule takes effect and new deadlines are established. Those deadlines, according to the March 2 announcement from the Treasury Department, will now apply only to "foreign reporting companies" as the new rulemaking narrows the scope of CTA's application.
What this means for aircraft owners
Many private aircraft owners structure ownership through limited liability companies or other business entities for tax, liability, or operational purposes. Under the previous administration, both foreign and domestic companies were subject to the CTA’s BOI reporting requirements, which mandate disclosure of key individuals who own or control a company. The announcements from Treasury and FinCEN provide much needed relief to domestic entities.
Upcoming regulatory changes
FinCEN plans to issue an interim final rule by March 21, which will officially extend the reporting deadlines and limit the scope of reporting requirements to foreign entities only. This means domestic entities—including many aviation related entities in the United States—need not comply with the rule or submit BOI information.
The announcements provide much welcome relief for private aircraft owners and aviation businesses.
AOPA will keep members informed of developments, and encourages affected members to seek legal or financial advice to ensure compliance when new reporting deadlines are finalized.
