A Guide to the U.S. Corporate Transparency Act and Federal Government Compliance

The U.S. Corporate Transparency Act, enacted in 2021, aims to combat illicit finance by requiring many companies to report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). This law mandates that existing companies file their reports within one year, while new companies must do so within 90 days of formation. This article explains the extra layer of federal government compliance and decodes a sudden policy shift that signals an alternative approach to regulation.

What is Federal Government Compliance?

At its simplest, federal government compliance means a business is following the laws and rules set by the federal government. This differs from corporate compliance, which refers to a company’s internal policies. Federal compliance is mandatory and covers a vast range of activities, including labor laws, tax filing, environmental protection, and, increasingly, data security and privacy.

The High Cost of Non-Compliance

Ignoring compliance requirements is a costly mistake. Federal regulations cost the U.S. economy over $3 trillion per year. For individual businesses, the penalties for non-compliance are very severe. Recent years have seen multi-million-dollar fines for failures in complying with healthcare and cybersecurity policies. The new Corporate Transparency Act carries penalties of $500 per day for willful non-compliance.

Temporary Suspension of the Act

The Corporate Transparency Act also serves as a perfect case study in policy volatility. On March 2, 2025, the Treasury Department announced it was suspending enforcement of the act for U.S. citizens and domestic companies. This move was part of a stated goal to rein in federal government compliance.

The sudden pause in the Corporate Transparency Act enforcement shows that federal government compliance is a moving target. Staying informed about complex policy shifts is no longer optional. It is a mandatory business strategy to ensure that companies avoid severe penalties and navigate a constantly changing regulatory environment.