By Julie Tomascik
Editor

The U.S. Treasury Department issued an interim final rule that exempts U.S. companies and individuals, including farmers and ranchers, from reporting beneficial ownership information (BOI) under the Corporate Transparency Act.

The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department, redefined the “reporting company” to include only entities formed under foreign laws that have registered to operate in the U.S.

That means Texas farms, ranches and agricultural businesses will no longer be required to submit information regarding individuals with major roles in those businesses. This applies to both existing businesses and new businesses established as corporations, limited liability companies or limited trusts in Texas.

“It is important to rein in burdensome regulations to the benefit of hard-working American taxpayers and small businesses,” U.S. Treasury Secretary Scott Bessent said in a statement.

Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption must still report their beneficial ownership information to FinCEN under revised deadlines. However, those entities will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report information in which they are beneficial owners.

A beneficial owner is defined as someone who has an ownership interest of 25% or more in a business, a majority of voting ownership or exerts “substantial control” over the entity.

This policy change follows a series of lawsuits and court rulings that challenged the constitutionality of the law.

The Corporate Transparency Act, passed in 2021, initially mandated millions of small businesses to disclose their beneficial owners to FinCEN to combat corruption and money laundering. But concerns about the compliance burden on small businesses led to legal disputes and calls for regulatory adjustments. ​

FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.

View the interim final rule.