The Corporate Transparency Act (CTA) looked like the biggest new compliance headache in a generation when it took effect on January 1, 2024. Congress passed the CTA in 2021 to give law enforcement a searchable database of who really owns U.S. business entities, with the goal of stopping money laundering, terrorism financing, and other misconduct routed through shell companies. In its original form, roughly 32 million reporting companies would have been required to file beneficial ownership information (BOI) with the Financial Crimes Enforcement Network (FinCEN).

That is no longer the law on the ground. On March 21, 2025, FinCEN issued an interim final rule that exempts every entity created in the United States from BOI reporting. Only a narrow slice of foreign reporting companies still has to file. The rule was published in the Federal Register on March 26, 2025, and took effect immediately (FinCEN, March 21, 2025 announcement).

This article explains what the CTA is, what changed in 2025, exactly who has to file today, what a compliant BOI report contains, and what could happen next. If you are a Phoenix or Mesa business owner wondering whether you missed something, the short answer is almost certainly no, but the longer answer matters because the rule can shift again. Our team can review your entity structure and confirm your status on any given day; contact K&R Strategic Partners if you want a clean second opinion.

What the Corporate Transparency Act does

The CTA is codified at 31 U.S.C. § 5336. Its stated purpose is to require certain U.S. businesses to disclose their beneficial owners to FinCEN, a bureau of the U.S. Department of the Treasury. The database is not public. It is available only to authorized federal, state, local, and tribal law enforcement, some regulators, and financial institutions performing customer due diligence with the reporting company's consent.

Under the original implementing regulations, a reporting company was any corporation, limited liability company, or other entity that was created by the filing of a document with the secretary of state or a similar office under the law of a state or Indian tribe, or that was registered to do business in the United States after being formed under foreign law. The rule carved out 23 exemptions covering banks, insurance companies, publicly traded companies, tax-exempt entities, large operating companies with more than 20 U.S. employees and $5 million in gross receipts, and several other categories. Every other entity was a reporting company and owed a BOI report.

Timeline: how we got to the current rule

Who has to file a BOI report today

As of the March 26, 2025 IFR, the definition of reporting company is limited to foreign reporting companies. That is an entity that is:

Even a foreign reporting company does not have to report U.S. persons as beneficial owners. A U.S. person who beneficially owns a foreign reporting company is also not required to be reported. This is a meaningful carve-out that materially shrinks the pool of people whose personal data ends up in the FinCEN database.

Who is exempt

Every entity created in the United States is now exempt. That includes corporations, LLCs, LPs, LLPs, and any other entity formed by filing a document with the secretary of state or similar office of a U.S. state or Indian tribe. The IFR added a new 24th exemption to cover exactly this category and deleted every reporting deadline that used to apply to domestic entities.

The 23 original CTA exemptions still exist for foreign entities that would otherwise be in scope, including exemptions for banks, insurance companies, credit unions, SEC-registered investment advisers, tax-exempt entities under IRC § 501(c), and large operating companies that employ more than 20 U.S. employees and reported more than $5 million in gross receipts on a U.S. tax return in the prior year (FinCEN BOI FAQs).

What a BOI report actually contains

If you are a foreign reporting company still in scope, your initial BOI report must identify three groups of people and information.

A minor child is not treated as a beneficial owner if a parent or guardian is reported. Nominees, custodians, and creditors are not counted. Individuals may obtain a FinCEN Identifier to avoid providing personal details to every reporting company they are attached to; see our FinCEN Identifier article for the practical mechanics.

Deadlines for foreign reporting companies

Penalties for non-compliance

Under 31 U.S.C. § 5336(h), civil penalties for willful failure to report or for filing false BOI can reach $591 per day per entity (inflation-adjusted from the statutory $500). Criminal penalties run up to $10,000 and up to two years in prison. FinCEN has publicly stated it is not enforcing against domestic reporting companies while the IFR is in effect, but the statute and the penalty ceilings remain in place for foreign reporting companies that fail to file.

Could the rule flip back?

Yes, and this is why business owners should not delete their CTA compliance playbooks. Two moving pieces matter.

First, the March 2025 IFR is administrative. A future Treasury or FinCEN could re-expand the definition of reporting company and put U.S. entities back in scope. Congress could also amend the statute in either direction.

Second, the December 2025 Eleventh Circuit decision in National Small Business United v. Yellen held that the CTA is a constitutional exercise of Congress's Commerce Clause power. That closes off one of the strongest litigation paths for opponents of the CTA and makes it easier for a future administration to revive full reporting. The Top Cop Shop case remains live at the Fifth Circuit and could reach the Supreme Court.

Bottom line: if you formed a U.S. corporation or LLC in the last two years, you owe no BOI report today. Save your ownership documentation, keep a list of substantial-control officers and 25 percent owners current, and be ready to file within 30 days if the rule is revised.

How this interacts with Arizona and state filings

Arizona itself does not require an equivalent state-level beneficial ownership filing. Arizona corporations file an annual report with the Arizona Corporation Commission (azcc.gov); Arizona LLCs and PLLCs file no annual report and pay no annual state fee. If you formed an Arizona entity through the Secretary of State or the Corporation Commission and never registered it in a foreign country, the March 2025 CTA IFR fully exempts you. If your entity structure includes a foreign parent or a foreign holding company that is registered to do business in Arizona, that piece is still in scope.

Frequently asked questions

Do I need to file a BOI report for my Arizona LLC in 2026?

No. Every entity created in the United States, including every Arizona LLC and corporation, is exempt under the March 26, 2025 interim final rule.

My accountant told me in 2024 that I had to file by January 1, 2025. Did I miss the deadline?

No. That deadline never applied because it was suspended by court injunctions in December 2024 and then removed entirely by the March 2025 IFR. FinCEN has publicly stated it will not enforce penalties against U.S. citizens or domestic reporting companies.

What if I already filed a BOI report in 2024?

Your report is stored in the FinCEN database but the reporting obligation is gone. You have no required action. FinCEN has not publicly confirmed a full data deletion process; if you have concerns, consult counsel.

Do foreign-owned Arizona LLCs have to file?

An LLC created under Arizona law is exempt, even if its members are non-U.S. persons. Only entities formed under foreign law and then registered to do business in a U.S. state remain in scope.

Could the CTA come back for U.S. companies?

Yes. The IFR is administrative and can be revised. Congress can also amend the statute. Business owners should keep compliance records current so they can file within 30 days if the rule changes.

Where can I read the interim final rule?

See FinCEN's BOI page for the current summary and the linked Federal Register version.

How K&R Strategic Partners can help

The CTA landscape has shifted three times in twelve months. If your business owns or is owned by entities formed abroad, if you use holding companies for asset protection, or if you are simply not sure whether your Arizona structure has any foreign exposure, we can map your ownership chain and confirm your reporting status in writing. K&R's Estate Planning, Trust and Entity Formation team handles entity setup and restructuring, our Strategic Tax Advisory and Preparation team ties it back to your federal and Arizona filings, and our IRS Representation group is available if a federal enforcement question arises. Start a conversation on our Services page or reach us directly through the contact form.

See also our earlier CTA coverage: CTA Frequently Asked Questions and CTA Update: FinCEN Identifier.