The U.S. Treasury Department announced on Sunday that it will not enforce penalties under the Corporate Transparency Act (CTA) for U.S. citizens or domestic reporting companies.
The CTA, enacted to enhance financial transparency, requires businesses to disclose the identities of their beneficial owners. However, the law has faced legal challenges, with critics arguing that it imposes compliance burdens on smaller businesses.
In its statement, the Treasury Department indicated that its decision aims to support taxpayers and small businesses. It also noted plans to introduce a rule narrowing the law’s application to foreign reporting companies.
Supporters of the CTA argue that the law helps combat illicit financial activities by addressing concerns over the use of U.S.-based entities for money laundering.
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