AICPA supports bills to limit BOI reporting to foreign-owned entities

The AICPA, in letters to Congress, said it supports legislation in the House and Senate that would codify Treasury’s 2025 interim rule limiting beneficial ownership information (BOI) reporting to foreign-owned entities, saying the bills provide relief for both small businesses and finance professionals.

The organization outlined its position in letters sent to Rep. Warren Davidson, R-Ohio, and to Sens. John Kennedy, R-La., and Mike Lee, R-Utah. The letters, dated May 15, were signed by Mark Koziel, CPA, CGMA, president and CEO of the AICPA.

“The accounting profession supports reasonable, effective, and risk-based tools to combat money laundering, terrorist financing, and illicit finance,” said the letter to the senators. “At the same time, overly broad reporting obligations can impose disproportionate burdens on legitimate domestic businesses, particularly small and mid-sized entities with limited administrative resources.”

Treasury’s interim rule suspended BOI reporting, as included in the Corporate Transparency Act (CTA), for domestic companies and U.S. citizens. The new bills would make that suspension permanent and require the Financial Crimes Enforcement Network (FinCEN) to delete BOI data previously collected from domestic entities.

In the Senate, Kennedy and Lee introduced S. 4419, a bill to amend Title 31, Money and Finance, of the U.S. Code, to require only foreign entities to report BOI, and for other purposes, which would also codify the interim rule and remove domestic reporting obligations.

“By narrowing the reporting framework, your bill would provide meaningful relief not only to small businesses, but also to the trusted financial professionals who help those businesses operate responsibly and comply with the law,” the letter to the senators said. “A more appropriately tailored law will allow CPAs and other advisers to focus their time on helping clients strengthen financial reporting, tax compliance, internal controls, and sound business operations rather than navigating burdensome and complex federal reporting requirements.”

In April, the House Financial Services Committee approved H.R. 425, the Repealing Big Brother Overreach Act, in a 26–25 vote. As amended in committee, the bill would limit BOI reporting to foreign beneficial owners and foreign-owned entities. Davidson has argued that the original BOI requirements impose compliance burdens that many small businesses are not prepared to manage.

Limiting the BOI reporting requirements to foreign owners and requiring FinCEN to delete previously collected BOI “represent an important effort to reduce unnecessary regulatory burden and safeguard data while preserving a more focused approach to financial crime enforcement,” the letter to Davidson said.

The bill recognizes “the need for Congress to reassess whether the rule’s scope is appropriately tailored to the U.S. government’s anti-money laundering objectives,” the letter said.

The AICPA noted that CPAs often help small businesses interpret new federal requirements and that broad or unclear rules can increase administrative costs.

CTA background

Under the CTA, Title 64 of P.L. 116-283, which Congress passed in 2021 as an anti-money-laundering initiative, reporting entities must disclose the identity of and information about their beneficial owners. Reporting entities are defined as corporations, limited liability companies (LLCs), and similar entities. Beneficial owners are defined as individuals owning 25% or more of a reporting entity’s ownership interests or exercising substantial control over it. For new entities formed after Jan. 1, 2024, reporting entities also are required to disclose the identity of “applicants” — defined as any individual who files an application to form or register a corporation, LLC, or other similar entity.

In March 2025, Treasury issued an interim final rule that removed the BOI regulatory filing requirement for domestic companies. However, in a brief filed in a court case challenging the CTA’s constitutionality, the Justice Department said the interim rule was an executive branch action that did not affect its constitutionality. In December 2025, the Eleventh Circuit held in the case that the CTA was constitutional and remanded it to a district court for further proceedings (National Small Business United, No. 24-10736 (11th Cir. 12/16/25)).

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.