House panel backs repeal of BOI reporting by domestic companies

A House committee voted to repeal beneficial ownership information (BOI) reporting by domestic companies, leaving only foreign-owned companies covered by the requirement.

In a 26–25 vote on Wednesday, the House Financial Services Committee approved H.R. 425, the Repealing Big Brother Overreach Act, which Rep. Warren Davidson, R-Ohio, introduced and has 193 co-sponsors. The bill would codify Treasury’s removal last year of the CTA’s regulatory requirements for U.S. companies and persons. It also directs Treasury’s Financial Crimes Enforcement Network to delete all information collected under the CTA with respect to domestic owners and entities.

“This is the most poorly thought out … poorly structured approach that I could think of, and I was glad to have so many other like-minded colleagues say this is a big brother overreach act,” Davidson said. “Why is the government telling us we have to report this information …? We don’t want bad things to happen to our country. But on the other side, how is a small business equipped to do this?”

In order to become law, besides passing the full House of Representatives, the bill would need to pass the Senate with 60 votes before being sent to President Donald Trump for his signature.

The CTA, as amended by the bill, would still apply to foreign beneficial owners and entities.

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 constitutionality of the CTA, the Justice Department said the interim rule was an executive branch action that did not affect the CTA’s 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)).

Support for CTA

A member of the committee, Rep. Stephen Lynch, D-Mass., defended the CTA, which he said “is designed to target bad actors, anonymous shell companies, which are commonly used by drug cartels, human traffickers, terrorists, fraudsters, scammers, some oligarchs, and other bad actors to hide and move their illicit activities and funds.”

The CTA, Lynch said, “requires a company to say who is behind them. … You can’t have a shell corporation.”

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