The Corporate Transparency Act (CTA) created a federal beneficial ownership information (BOI) reporting requirement designed to combat money laundering, terrorism financing, and the misuse of shell companies. Since its enactment in 2021 and initial effective date in January 2024, the CTA has undergone significant regulatory changes. As of March 26, 2025, FinCEN's interim final rule exempts all U.S.-formed entities from BOI reporting. Only foreign-formed companies registered to do business in the United States must currently file. Below, we answer the most common questions Arizona business owners have about the Corporate Transparency Act in 2026 and what it means for your company.

What Is the Corporate Transparency Act?

The Corporate Transparency Act was enacted on January 1, 2021, as part of the National Defense Authorization Act for Fiscal Year 2021 (P.L. 116-283). Congress passed the CTA on a bipartisan basis to create a national registry of beneficial ownership information maintained by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

The CTA's purpose is to make it harder for bad actors to hide behind opaque corporate structures when engaging in money laundering, tax evasion, fraud, or terrorism financing. It does this by requiring certain entities (called "reporting companies") to disclose identifying information about the individuals who own or control them.

What Is Beneficial Ownership Information?

Beneficial ownership information (BOI) refers to identifying details about the individuals who directly or indirectly own or control a company. Under the CTA's reporting requirements, each beneficial owner must provide their full legal name, date of birth, current residential or business address, and a copy of a government-issued photo ID (such as a driver's license or passport).

A beneficial owner is defined as any individual who either (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company's ownership interests. Senior officers (CEO, CFO, COO, general counsel) are generally considered to exercise substantial control regardless of their ownership percentage.

Who Must File a BOI Report in 2026?

This is the most important question for Arizona business owners, and the answer has changed dramatically since the CTA first took effect.

On March 21, 2025, FinCEN announced an interim final rule that removed BOI reporting requirements for all U.S.-formed entities. The Treasury Department formally published this rule on March 26, 2025, with immediate effect. Here is what this means in practice:

  • All domestic reporting companies are exempt. Every entity created in the United States, including LLCs, corporations, limited partnerships, and other entities filed with a secretary of state, is now exempt from BOI reporting obligations.
  • U.S. persons are exempt. U.S. citizens and residents are not required to provide BOI, even as beneficial owners of foreign reporting companies.
  • Only foreign reporting companies must file. Entities formed under the law of a foreign country that have registered to do business in any U.S. state or tribal jurisdiction remain "reporting companies" and must file BOI reports with FinCEN.
  • No penalties for domestic companies. The Treasury Department confirmed on March 2, 2025, that it will not enforce any CTA penalties or fines against U.S. citizens or domestic reporting companies.

Timeline of Key CTA Developments

The CTA's journey from enactment to its current form has been unusually turbulent. Here is a brief chronology:

  • January 1, 2021: Congress enacts the Corporate Transparency Act as part of the NDAA for FY2021.
  • September 30, 2022: FinCEN publishes the final BOI reporting rule (31 CFR 1010.380).
  • January 1, 2024: BOI reporting requirements take effect. Entities formed before this date have until January 1, 2025 to file initial reports. Entities formed on or after January 1, 2024 have 90 calendar days.
  • December 3, 2024: A federal court in Texas issues a nationwide preliminary injunction halting CTA enforcement (Texas Top Cop Shop v. Garland).
  • February 18, 2025: The Fifth Circuit lifts the injunction, temporarily reinstating enforcement with a March 21, 2025 deadline.
  • March 2, 2025: Treasury Department suspends enforcement of all CTA penalties against domestic companies and U.S. citizens.
  • March 21, 2025: FinCEN issues interim final rule exempting domestic reporting companies.
  • March 26, 2025: Interim final rule published in the Federal Register with immediate effect.
  • December 16, 2025: The Eleventh Circuit Court of Appeals upholds the CTA's constitutionality, reversing a lower court ruling.
  • June 5, 2026: A final rule is submitted to the Office of Management and Budget's OIRA for review, expected to be published in the coming weeks.

What Are the Filing Deadlines for Foreign Reporting Companies?

Under the March 2025 interim final rule, only foreign-formed entities registered to do business in the U.S. have filing deadlines:

  • Registered before March 26, 2025: Initial BOI report was due by April 25, 2025.
  • Registered on or after March 26, 2025: Must file an initial BOI report within 30 calendar days of receiving notice that their registration is effective.
  • Updates and corrections: Foreign reporting companies must update previously filed BOI reports within 30 days of any change in reported information.

There is no annual reporting requirement under the CTA. Once a BOI report is filed, it does not need to be renewed unless information changes.

What Are the Penalties for Noncompliance?

The CTA's penalty provisions remain part of federal law, even though enforcement against domestic companies is currently suspended. For foreign reporting companies that are still required to file, potential penalties include:

  • Civil penalties: Up to $591 per day (inflation-adjusted from the statutory $500) for each day a willful violation continues, with no statutory cap on accumulation.
  • Criminal penalties: Up to two years of imprisonment and a fine of up to $10,000 for willfully filing false information, willfully failing to file, or willfully failing to correct previously reported information.

Both individuals and corporate entities can be held liable for willful violations. This includes not only the person who files (or fails to file) but also anyone who willfully provides false information to the filer. Senior officers may be personally liable for a company's failure to report.

FinCEN has stated that if you correct a mistake or omission within 90 days of the original report deadline, you may avoid penalties.

What Are the 23 Exemptions from BOI Reporting?

Even before the March 2025 interim final rule exempted all domestic entities, the CTA carved out 23 categories of exempt entities. These exemptions remain relevant for foreign reporting companies and may be important if future rulemaking reinstates any domestic reporting obligations. Exempt entity types include:

  • Publicly traded companies and their subsidiaries
  • Banks, credit unions, and other financial institutions already regulated by federal agencies
  • Insurance companies
  • Registered investment companies and investment advisers
  • Tax-exempt organizations (501(c) entities)
  • Large operating companies (more than 20 full-time U.S. employees, more than $5 million in gross receipts reported on the prior year's tax return, and a physical U.S. office)
  • Certain inactive entities formed before January 1, 2020

A complete list of exemptions is available on FinCEN's BOI FAQ page.

What Is a FinCEN Identifier?

A FinCEN Identifier (FinCEN ID) is a unique number that FinCEN issues to an individual or reporting company after receiving their information. Beneficial owners can apply for a FinCEN ID and use it on BOI reports instead of providing their personal information repeatedly across multiple entities.

While the federal government does not require a FinCEN ID, it can simplify the reporting process for individuals who are beneficial owners of multiple entities. Foreign reporting companies that remain subject to the CTA may find FinCEN IDs useful for their non-U.S. beneficial owners.

Could the CTA Requirements Change Again?

Yes. Business owners should remain aware that the regulatory landscape is still evolving:

  • The CTA remains a duly enacted federal law. The Eleventh Circuit Court of Appeals confirmed its constitutionality in December 2025.
  • FinCEN's March 2025 action was an interim final rule, not a permanent repeal. A final rule was submitted to OMB/OIRA for review on June 5, 2026, and is expected to be published soon.
  • The final rule could potentially narrow or expand reporting obligations, though current policy direction suggests domestic exemptions will remain in place.
  • Some states have begun enacting their own beneficial ownership disclosure requirements. New York's LLC Transparency Act, for example, took effect January 1, 2026, and applies to foreign LLCs authorized to do business in New York.

For these reasons, maintaining accurate and accessible records of your entity's ownership structure remains a sound governance practice, even if federal reporting is not currently required for domestic companies.

How Does This Affect Arizona Business Owners?

Arizona LLCs, corporations, limited partnerships, and other entities formed with the Arizona Corporation Commission are domestic entities under the CTA and are therefore currently exempt from BOI reporting.

Arizona does not have a state-level equivalent of the CTA or any state beneficial ownership reporting requirement. Unlike New York, Arizona has not enacted a standalone transparency act. However, Arizona entities that are registered to do business in states with their own transparency requirements (such as New York) may need to comply with those state-level obligations.

If you operate a foreign-formed entity that is registered to do business in Arizona, you remain subject to the CTA's BOI reporting requirements under the current interim final rule.

Frequently Asked Questions

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

No. As of March 26, 2025, all entities formed in the United States, including Arizona LLCs, are exempt from BOI reporting requirements under FinCEN's interim final rule.

What if I already filed a BOI report?

If you already filed a BOI report for a domestic entity, you are not required to update or correct it. FinCEN has stated that domestic reporting companies do not need to take any further action.

Is the Corporate Transparency Act repealed?

No. The CTA remains federal law. What changed is FinCEN's implementing regulation, which now defines "reporting company" to include only foreign-formed entities. The underlying statute has not been repealed or amended by Congress.

Do foreign companies registered in Arizona need to file?

Yes. A company formed under the laws of a foreign country that has registered to do business in Arizona (or any other U.S. state) must file a BOI report with FinCEN. However, that foreign company does not need to report any U.S. persons as beneficial owners.

Should I still keep my ownership records organized?

Yes. Even though domestic BOI reporting is currently suspended, maintaining clear records of your entity's ownership and control structure is a best practice for governance, financing, insurance, and potential future compliance obligations.

How K&R Taxes Can Help

K&R Taxes has tracked the Corporate Transparency Act since its enactment and guided clients through every stage of its turbulent regulatory history. While domestic BOI reporting is currently suspended, our team continues to monitor FinCEN's rulemaking and any state-level transparency requirements that could affect your business.

If you own or control a foreign-formed entity registered in Arizona or another state, our team can assist with BOI report preparation, FinCEN ID applications, and ongoing compliance monitoring. We also help business owners maintain the kind of organized ownership documentation that supports clean governance, smooth financing, and readiness for any future regulatory changes.

For questions about the Corporate Transparency Act, entity formation, or tax planning, contact our team. You can also learn more about our estate planning and entity formation services or explore related topics like FinCEN Identifiers and CTA updates.