If you formed an LLC or corporation in the United States, you spent the last two years watching the same headline flip back and forth: file your Beneficial Ownership Information report, wait, don't file, file again, never mind. In March 2026, FinCEN finally said what most small businesses wanted to hear — domestic companies and their U.S. owners no longer have to file. But that relief lives in a regulation, and regulations can be rewritten. H.R. 425, the Repealing Big Brother Overreach Act, is Congress's attempt to make that exemption permanent in statute. Here's what is actually in effect today, what H.R. 425 would change, and what you should (and should not) do with your books in the meantime.
How We Got Here: A 90-Second Timeline
The Corporate Transparency Act (CTA), enacted in 2021 as part of the National Defense Authorization Act, directed FinCEN to collect beneficial ownership information (BOI) from most entities created by filing with a secretary of state. The goal was to unmask shell companies used for money laundering. The implementing rule created two categories:
- Reporting companies — corporations, LLCs, and similar entities created or registered by filing in the U.S.
- Beneficial owners — individuals who own 25% or more or who exercise substantial control, plus the company applicant for entities formed on or after January 1, 2024.
Original deadlines were aggressive: entities existing before January 1, 2024 had until January 1, 2025; entities formed in 2024 had 90 days; entities formed on or after January 1, 2025 had 30 days. Non-willful violations carried civil penalties that adjusted for inflation — about $591 per day — and willful violations could bring criminal fines up to $10,000 and two years in prison.
Then the courts intervened. A federal court in Alabama ruled the CTA unconstitutional in early 2024, a Texas court issued a nationwide preliminary injunction in late 2024 in Texas Top Cop Shop, the Supreme Court stayed that injunction, another Texas court re-imposed one, and FinCEN responded with a rolling series of deadline extensions and enforcement pauses. By December 2024 through February 2025, FinCEN was telling companies enforcement was on hold while litigation continued.
On March 21, 2025, FinCEN issued an interim final rule that fundamentally changed the scope: it exempted domestic reporting companies and their U.S. beneficial owners from filing at all. Only entities formed under foreign law and registered to do business in the U.S. — "foreign reporting companies" — still had to report, and only their non-U.S. persons needed to be listed. FinCEN finalized that approach in the spring of 2026 and simultaneously reopened the regulatory docket to revisit the definition. The March 2025 press release headline said it plainly: FinCEN removes BOI reporting requirements for U.S. companies and U.S. persons.
That is where things stand today. If your company was formed in Delaware, Texas, Florida, or any other U.S. state, you do not currently have a federal BOI filing obligation.
What H.R. 425 Would Do — and Why It Matters
H.R. 425, titled the Repealing Big Brother Overreach Act, was introduced in the 119th Congress to amend the CTA itself. Its core provision is simple: it would permanently exempt entities created in the United States from the definition of "reporting company."
Why push a bill if FinCEN already exempted you?
- Regulations are reversible. An interim final rule can be replaced by a future rulemaking. A new administration, a court vacating the rule, or a policy reversal could put domestic companies back on the hook without any act of Congress. A statute is far harder to undo.
- Certainty for formation decisions. Banks, lenders, and investors price uncertainty. Making the exemption statutory tells formation agents, registered agents, and small business owners that the 32 million domestic entities FinCEN estimated would have filed are not about to be pulled back in on 30 days' notice.
- Litigation clean-up. Codification would moot much of the ongoing constitutional litigation over the CTA's application to domestic entities, leaving only the narrower foreign-entity question.
As of June 2026, H.R. 425 had been marked up and was moving through the House Financial Services Committee, with companion discussions in the Senate. Passage is not guaranteed, and even if the House passes it, the Senate calendar and any conference process could stretch into late 2026. The article that inspired this post — a June 2026 Holland & Knight analysis titled "What Happened to FinCEN's Corporate Transparency Act" — frames H.R. 425 as the legislative bookend to FinCEN's regulatory retreat: the agency stepped back, now Congress is being asked to nail the door shut.
It is important to understand what H.R. 425 would not do:
- It would not repeal the CTA entirely. Foreign reporting companies would still report.
- It would not eliminate other FinCEN obligations like Customer Due Diligence at banks, suspicious activity reporting, or tax reporting.
- It would not preempt state transparency laws. New York's LLC Transparency Act, for example, creates its own state-level BOI filing for LLCs formed or authorized in New York, with a database not visible to the public but accessible to law enforcement. Other states are watching closely.
Who Has to File Today (and Who Doesn't)
Think in two buckets:
1. Domestic reporting companies — currently exempt
If you checked a box to create any of these by filing with a secretary of state, you are in this bucket:
- Single-member LLC for your freelance consulting
- Multi-member LLC for a rental property
- S corporation or C corporation for your shop
- Limited partnership or limited liability partnership created by filing
Current federal obligation: none. You do not need to file an initial BOI report, an update when an owner moves, or a correction. You also do not need a FinCEN identifier to satisfy a non-existent filing.
But do not delete your records. Banks must still collect beneficial ownership information under the 2016 Customer Due Diligence Rule when you open an account or apply for credit. Lenders for SBA 7(a) or 504 loans will ask for the same ownership chart FinCEN would have wanted. Keep a one-page cap table showing legal names, dates of birth, addresses, ownership percentages, and a copy of a government ID for each 25%+ owner and control person. Update it when ownership changes. That sheet satisfies a bank in five minutes and would satisfy FinCEN again in the future if the law flips.
2. Foreign reporting companies — still required to file
This is the narrow group that remains on FinCEN's books:
- An entity formed under the laws of a foreign country
- That has registered to do business in the U.S. by filing with a secretary of state or tribal office
What they file: Beneficial owners who are not U.S. persons. U.S. persons who are beneficial owners of a foreign reporting company are now exempt from being reported. The company applicant obligation is also narrowed for foreign entities.
Deadlines for foreign companies: After the March 2025 interim final rule, FinCEN set new deadlines for foreign reporting companies that were already registered or that register going forward — generally 30 days from registration or from the rule's publication, with extensions announced for entities registered before the rule. Check the FinCEN BOI site for the exact date applicable to your registration, because FinCEN has moved these dates several times.
Penalties still apply to foreign reporting companies that fail to file: the same inflation-adjusted civil penalty (about $591 per day) and potential criminal exposure for willful failures.
If you are a U.S. company that is wholly owned by a foreign parent, you — the U.S. subsidiary — are exempt as a domestic entity, but your foreign parent, if registered to do business in the U.S., may itself be a foreign reporting company with a filing obligation.
The State-Level Patchwork Is Not Going Away
When FinCEN stepped back, state capitals stepped forward. The most immediate example is New York:
- New York LLC Transparency Act — Signed in 2023 and amended before its effective date, it will require LLCs formed or authorized to do business in New York to disclose beneficial owners to the Department of State. The database is not public, but it is available to law enforcement and prosecutors. FinCEN's federal exemption does not excuse a New York filing.
California, and several other states, have floated similar registries. None has created a public, searchable ownership database like the UK's, but the direction is clear: even if H.R. 425 passes, you may still have a state filing in the state where you operate.
Practical tip: add a recurring annual check to your compliance calendar — "State BOI / annual report / franchise tax" — for every state where you are formed or foreign-qualified. The federal story will dominate headlines, but the state filing is the one that can actually dissolve your authority to do business if you ignore it.
Common Mistakes Small Businesses Still Make
1. Filing anyway "to be safe" and creating a new data trail
Some formation services still prompt you to file a BOI report through a third-party portal and charge a fee. If you are a domestic company, there is nothing to file with FinCEN right now. Creating a filing when none is required sends personal ID images to a system you did not need to use and creates a record you will then have to correct if an address changes. Unless you are a foreign reporting company, close that browser tab.
2. Assuming "exempt" means "anonymous"
Exempt from FinCEN does not mean exempt from everyone. Your bank, your payment processor doing enhanced due diligence, your commercial landlord, your insurance carrier, and any buyer doing due diligence will all ask who owns the company. If your internal records are messy — owners listed as "John S." with no percentage, no address, no ID — you will reconstruct them under time pressure during a loan closing. Maintain them as if you had to file next week.
3. Forgetting the 30-day update habit
FinCEN's original rule required updates within 30 days of a change. While that requirement is currently moot for domestic companies, it is an excellent internal discipline. When a member leaves, when you move, when you issue new equity to an advisor, update your internal BOI sheet the same week. If H.R. 425 stalls and a future rule reinstates reporting, you will be current instead of scrambling through two years of cap table changes.
4. Mixing up BOI with state annual reports
BOI was a one-time filing plus updates. Annual reports, franchise tax reports, and statements of information are separate state obligations with their own fees and due dates. Dissolving a forgotten LLC in one state while keeping another active is not a substitute for filing the annual report. Mark both on your calendar.
Bookkeeping and Recordkeeping: What to Keep Now
Even with no federal filing, the right records make every downstream interaction cheaper. Treat this as a lightweight "BOI binder" — physical or digital — that lives next to your corporate book:
- Formation documents — certificate of formation, articles of incorporation, operating agreement or bylaws, and any amendments.
- Ownership ledger — name, date of birth, residential address, ownership percentage, date ownership began, and role (officer, manager, director). Note anyone with substantial control even if under 25%. This mirrors the FinCEN definition and keeps you aligned if reporting returns.
- ID copies — a clear image of a driver's license or passport for each person in the ledger. Store encrypted, with access limited to owners and your CPA or attorney.
- Corporate actions — minutes or written consents for ownership changes, new members, buyouts, and address changes.
- State filings — stamped annual reports and good-standing certificates for each state where you are registered.
If you use plain-text accounting, this binder pairs naturally with your ledger. A single entities/ directory with a cap-table.bean or simple CSV that lists owners and percentages, version-controlled alongside your transactions, gives you a reconstructable history. When your bank asks for a beneficial ownership certification, you export the current sheet instead of rebuilding it from emails.
For foreign reporting companies that must still file, also keep:
- The FinCEN submission receipt and transcript for each filing
- A log of deadlines (initial, updates, corrections) with 30-day ticklers
- A checklist that U.S. person owners are correctly marked as exempt so you do not over-report
What to Watch Next
- H.R. 425 floor action. If it passes the House, watch for Senate companion language. A clean exemption for domestic entities is the simplest version; amendments could add carve-outs or reporting for entities that acquire real estate for cash, a topic FinCEN has pursued separately through its Residential Real Estate Rule.
- FinCEN's final rule publication. The interim final rule solicited comments. The final rule could tweak the definition of foreign reporting company, the treatment of U.S. persons, or the applicant rule. Read the Federal Register notice, not just the headline.
- New York rulemaking. The Department of State must issue regulations and a filing portal before the state law is fully operational. Early drafts have already changed deadlines once.
- Court challenges. Even with a domestic exemption, litigants may challenge the CTA as applied to foreign entities, which could again produce injunctions and deadline shifts.
Set a quarterly reminder: "Check FinCEN BOI and state registry updates." Fifteen minutes every three months beats a frantic day of research when a lender asks why your filing status changed.
Bottom Line for Domestic Small Businesses
Today, you do not have a federal BOI report to file if your company was created in the United States. That is a direct result of FinCEN's March 2025 interim final rule and its 2026 finalization, not yet of a statute. H.R. 425 would cement that result in law by amending the Corporate Transparency Act to permanently exclude domestic entities — turning a reversible regulation into a durable exemption.
Until Congress acts, treat the current exemption as real but not yet permanent. Keep your ownership records as if you had to file tomorrow, skip the fee-charging portals that offer to file for you, and shift your compliance energy to the filings that still exist: state annual reports, tax returns, and, if you are a foreign entity registered in the U.S., the narrow BOI obligation that remains.
Simplify Your Financial Management
Whether FinCEN requires a BOI report this year or not, lenders and banks will still ask who owns your business and how the money moves. Keeping a clean, version-controlled ledger — where ownership, capital contributions, and daily transactions live side by side — makes those questions easy to answer. Beancount.io gives you plain-text accounting that is transparent, version-controlled, and AI-ready, so your corporate records and your books tell the same story. Get started for free and keep your finances organized from day one.