The Corporate Transparency Act: What psychologists with corporations or LLCs need to know

The Corporate Transparency Act (CTA) is a federal law enacted in 2021 that initially required certain corporations and LLCs, including psychology practices structured as such, to disclose information about their “beneficial owners”—the individuals who ultimately own or control the company—to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. This information includes names, addresses, dates of birth, and identification document numbers. This information is kept confidential and is primarily used for law enforcement purposes to combat money laundering, terrorist financing, and other illicit activities.

The CTA generally targeted smaller entities, which could include your psychology practice, as these smaller corporations and LLCs historically lacked the reporting requirements of larger, publicly traded companies, potentially making them vulnerable to misuse for money laundering and other illicit activities.

Due to an interim final rule issued by FinCEN effective March 26, 2025, psychology practices structured as a corporation or LLC that were formed in the United States are now exempt from complying with the CTA and filing a BOI report.

This is because the definition of “reporting company” has been significantly narrowed and solely refers to entities formed under the laws of a foreign country that have registered to do business in any U.S. state or tribal jurisdiction by filing a document with a secretary of state or similar office.

Therefore, if your psychology practice is a corporation, LLC, or other similar entity formed in the U.S., you are no longer required to comply with the BOI reporting requirements of the CTA.

Given the recent changes, if your psychology practice is a domestic entity, the answer is: you do not need to report any BOI. The previous requirements regarding personal and company information now only apply to a very specific subset of entities: foreign companies registered to do business in the U.S. and their non-U.S. beneficial owners.

As domestic psychology practices are now exempt, you do not need to file a BOI report online through FinCEN’s websiteopens in new window. The previous reporting deadlines and the recent suspension of enforcement are now largely irrelevant for U.S.-formed entities.

The CTA has faced several legal challenges since its enactment, leading to some uncertainty regarding its enforcement and reporting requirements. The most impactful recent development is the issuance of an interim final rule (IFR) by FinCen, which became effective on March 26, 2025. This rule fundamentally alters the scope of BOI reporting by:

• Exempting U.S. companies: The IFR explicitly exempts all entities formed in the United States from the definition of “reporting company.”
• Exempting U.S. beneficial owners: U.S. individuals who are beneficial owners of any entity, including foreign ones, no longer need to report their beneficial ownership information.
• Narrowing the definition of reporting company: Only entities formed under the laws of a foreign country and registered to do business in the U.S. are now considered “reporting companies.”
• Adding reporting obligations for foreign companies: These foreign reporting companies still have BOI reporting obligations, but they only need to report information about the company itself and their non-U.S. beneficial owners. New deadlines have been established for these foreign entities.

The previous legal challenges mentioned above have been superseded by this significant regulatory change implemented through the IFR. The U.S. Treasury Department had previously indicated its intent to narrow the scope of the rule, and this IFR reflects that intention.

These legal challenges and subsequent actions by FinCEN and the U.S. Treasury Department highlight the evolving nature of the CTA and its reporting requirements. The most recent release of the IFR from FinCEN took effect immediately on March 26, 2025; however, FinCEN has opened a 60-day public comment period (ending on May 27, 2025). After reviewing these comments, FinCEN may issue a final rule that could potentially modify or retain the changes in this IFR.

If you have already filed your BOI report, while it is no longer required, there is no indication that this will cause any issues.

If you haven’t yet filed and your practice is a domestic entity, you are no longer obligated to do so under the current regulations. APA Services will continue to monitor any further developments, especially the issuance of a final rule after the public comment period. While the current landscape offers significant relief to domestic psychology practices, staying informed about any future updates or changes to the CTA’s status remains prudent.