Tax Tip Tuesday: BOI Reporting for Domestic Companies May Be Going Away — Here's What You Need to Know

If you've been following the saga of beneficial ownership information (BOI) reporting under the Corporate Transparency Act (CTA), here's an update worth paying attention to: Congress is making a move to permanently eliminate the requirement for domestic companies.

This is a fast-moving area of law, and the rules have already shifted more than once. Let's break down where things stand today — and what it means for your business.

The Corporate Transparency Act was passed by Congress in 2021 as part of an anti-money-laundering initiative. Under the CTA, most corporations, LLCs, and similar entities were required to report information about their beneficial owners — generally defined as individuals who own 25% or more of the company or exercise substantial control over it.

The goal was transparency: the government wanted to know who is actually behind a business, not just the name on the filing.

For many small business owners, this came as a surprise. The requirement was new, the penalties for non-compliance were steep, and the timeline for implementation created significant confusion.

On April 27, 2026, the House Financial Services Committee voted 26–25 to advance H.R. 425, the Repealing Big Brother Overreach Act. The bill, introduced by Rep. Warren Davidson (R-Ohio), would do two things:

1. Codify Treasury's removal of BOI filing requirements for U.S. domestic companies — making what was previously just a regulatory change into actual law.

   
   

2. Direct FinCEN to delete all BOI data already collected on domestic owners and entities.

   
   

If passed into law, the CTA's reporting requirements would apply only to foreign-owned companies and foreign beneficial owners — not to domestically owned businesses.

Hasn't Treasury Already Suspended Domestic BOI Requirements?

Yes — and this is an important nuance. In March 2025, Treasury issued an interim final rule that removed the BOI filing requirement for domestic companies. So practically speaking, most U.S. businesses are not currently required to file.

However, that regulatory change doesn't affect the underlying law. The CTA itself is still on the books, and its constitutionality has already been upheld. In December 2025, the Eleventh Circuit ruled that the CTA was constitutional in National Small Business United v. Yellen — meaning the current relief is executive action, not a permanent legal change.

H.R. 425 would make the domestic exemption permanent through legislation, rather than leaving it subject to reversal by a future administration.

What About the Data FinCEN Already Collected?

This is a point the bill specifically addresses. H.R. 425 would require FinCEN to delete all BOI information already collected from domestic companies. If you filed previously when the requirements were in effect, that data wouldn't just be mothballed — it would be erased.

What's the Argument for Keeping the Requirement?

Not everyone is on board with repeal. Supporters of the CTA argue that BOI reporting is a targeted tool for catching bad actors — shell companies used by drug cartels, fraudsters, and other criminal enterprises to hide money and move illicit funds. The concern is that stripping the requirement for domestic companies creates a loophole that sophisticated bad actors can exploit.

It's a real tension: the reporting burden on legitimate small businesses versus the transparency benefit for law enforcement. Reasonable people disagree on where to draw that line.

Does This Bill Become Law Automatically?

Not yet — not by a long shot. Here's what still has to happen:

• The full House of Representatives must pass the bill

• It then needs to pass the Senate with 60 votes (a high bar)

• The President must sign it into law

Congressional timelines are unpredictable, and the 60-vote Senate threshold means bipartisan support is required. This could pass, stall, or change shape entirely before it's finalized.

What Should Business Owners Do Right Now?

For most domestic companies: you are currently not required to file BOI reports under Treasury's interim rule. That relief is in effect today.

That said, here's our advice:

• Don't assume the issue is permanently resolved. The underlying law still exists, and the regulatory relief could change.

• If you have foreign beneficial owners or your entity was formed or organized outside the U.S., BOI reporting requirements still apply to you and have not been suspended.

• Watch this space. If H.R. 425 advances or the Senate takes action, we'll update you here.

  
  

As always, the best approach is to stay informed and proactive — changes like this can move quickly, and the penalties for non-compliance are not trivial.

Have questions about where your business stands under the current rules? We're here to help.📧 Contact us at info@mkhstaxgroup.com