FinCEN Issues New Corporate Transparency Act FAQ Guidance

The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) on April 18, 2024, updated its extensive FAQ guidance on the Corporate Transparency Act (CTA). The update includes 14 entirely new questions and two revised answers, addressing several areas of uncertainty for companies navigating the new beneficial ownership information (BOI) reporting rules that took effect this year.

Sophisticated counsel and their clients care because the CTA is a complex law with steep civil and criminal penalties for non-compliance. The new guidance provides critical clarity on topics including the reporting status of S-corporations and entities not formed by a state filing, how to identify beneficial owners when ownership is held through trusts, and how reporting obligations apply when a company's eligibility for an exemption fluctuates. The FAQs also address access to the BOI database by federal, state, and foreign government agencies. Companies and their advisors should review the new guidance to ensure their compliance approach aligns with FinCEN's latest interpretations, particularly regarding complex ownership structures involving trusts.