The U.S. House of Representatives unanimously passed the Protect Small Businesses From Excessive Paperwork Act of 2025 (H.R. 736), granting small businesses an extra year to comply with the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements.
According to a report by the Journal of Accountancy, the bill, which now moves to the Senate, extends the deadline to Jan. 1, 2026, offering relief to 32 million small businesses previously required to file by 2025.
A companion bill was introduced in the Senate by Tim Scott, R-S.C., chairman of the Senate Banking Committee. The proposed extension applies only to businesses formed before Jan. 1, 2024; newer entities remain subject to existing deadlines.
Melanie Lauridsen, AICPA’s vice president of Tax Policy & Advocacy, expressed optimism about the extension but noted that court decisions could still impact reporting requirements. Meanwhile FinCEN, which enforces BOI regulations, continues to recommend voluntary filing despite ongoing legal challenges.
As The Trusted Professional reported, the Department of Justice (DOJ) recently filed a motion seeking to lift a nationwide injunction on BOI reporting requirements in a Texas court case.
The Trusted Professional also said that FinCEN is contemplating potential changes to BOI reporting requirements, contingent on a federal district court lifting an injunction that currently blocks enforcement. In a Feb. 5 court filing, the Treasury Department, which the FinCEN is under, stated that FinCEN would grant a 30-day filing extension if the stay is approved, It will also be evaluating modifications to ease the burden on low-risk entities and focus enforcement on those posing the most significant national security risks.
The CTA, passed in 2021, mandates businesses report ownership details to combat money laundering and financial crimes. Non-compliance carries severe penalties, including fines of $606 per day (up to $10,000) and two years in prison for willful violations.