Businesses Urge Treasury to Destroy BOI Data and Finalize Exemption

Why It Matters

Eliminating unnecessary BOI records reduces privacy risks and clarifies regulatory obligations for millions of U.S. businesses, influencing compliance costs and data‑security policies.

Key Takeaways

• 100+ associations demand BOI data destruction
• FinCEN filed 6.5M BOI reports
• Interim rule limits reporting to foreign entities
• Legal challenges threaten CTA’s future
• Data breach risk drives urgency for deletion

Pulse Analysis

The Corporate Transparency Act, enacted in 2021, introduced a nationwide beneficial ownership reporting regime aimed at curbing money‑laundering and illicit finance. Under the CTA, corporations and limited‑liability companies were required to disclose owners' names, addresses, and identification numbers to FinCEN, creating a centralized database of sensitive personal information. While the policy was praised for enhancing transparency, critics warned that aggregating such data could become a lucrative target for cyber‑attackers, especially if the information is retained beyond its statutory purpose.

In March 2025, FinCEN issued an interim final rule that effectively narrowed the reporting scope to foreign entities, acknowledging that domestic firms no longer need to submit BOI. This regulatory shift prompted a coalition of small‑business groups, led by the Main Street Employers Coalition, to petition Treasury Secretary Scott Bessent to both destroy the existing domestic BOI records and issue a permanent exemption. The coalition highlights that roughly 16 million domestic entities previously complied, generating about 6.5 million reports, and argues that continued storage poses unnecessary cybersecurity and privacy risks. Their appeal gains urgency amid a wave of litigation—12 federal cases, including a pending Supreme Court review—questioning the CTA’s constitutionality and the executive branch’s authority to modify its requirements.

If Treasury acts swiftly to purge the data and codify the exemption, the move could set a precedent for balancing transparency objectives with data‑privacy safeguards. Companies would benefit from reduced compliance overhead and lower exposure to data‑breach liabilities, while regulators would need to rely on alternative tools to monitor illicit activity. Conversely, a delay could fuel further legal challenges and erode confidence among Main Street businesses, potentially prompting additional legislative revisions. The outcome will shape the future of corporate disclosure policy and signal how the U.S. government reconciles anti‑money‑laundering goals with evolving privacy expectations.

Businesses urge Treasury to destroy BOI data and finalize exemption

By Martha Waggoner · February 6, 2026

Just over 100 business associations have urged Treasury to destroy beneficial ownership information (BOI) records that domestic companies no longer must file, saying the retention of the records no longer serves a legitimate purpose.

In the letter (PDF), the businesses also asked Treasury Secretary Scott Bessent to post a final rule that exempts U.S. businesses from the BOI reporting requirement that was part of the Corporate Transparency Act (CTA), Title 64 of P.L. 116‑283.

“These beneficial owners’ sensitive personal information — including their names, addresses, and passport or driver’s license numbers — remains in a database managed by the Financial Crimes Enforcement Network, exposing them to ongoing cybersecurity and unauthorized disclosure risks,” the letter said.

CTA background

The Financial Crimes Enforcement Network (FinCEN), which administers BOI reporting under the CTA, issued an interim final rule in March that removed the requirement for U.S. companies and persons to report BOI.

Under the CTA, which Congress passed in 2021 as an anti‑money‑laundering initiative, reporting companies (corporations, limited liability companies, and similar entities) were required to disclose the identity and information about beneficial owners of the entities. For new entities incorporated after Jan. 1, 2024, reporting companies also were required to disclose the identity of “applicants” — defined as any individual who files an application to form a corporation, LLC, or other similar entity.

Letter to Treasury

About 16 million domestic entities complied with BOI reporting requirements before the administration narrowed them to apply only to foreign entities, said the letter, dated Jan. 20. In November 2024, FinCEN estimated that reporting companies had filed 6.5 million BOI reports.

The 101 signatories represent “millions of Main Street businesses,” said the letter, which was initiated by the Main Street Employers Coalition, an affiliate of S‑CORP. They include the National Small Business Association (NSBA) and the National Federation of Independent Business (NFIB), which sued separately over the BOI reporting requirements.

Previously, in a letter sent last April, the NFIB asked Bessent to add language to the interim final rule to require the destruction of the BOI records.

FinCEN comments

When FinCEN Director Andrea Gacki spoke in September to a House subcommittee, she said FinCEN planned to finalize the interim rule on BOI reporting “in the upcoming year.” She also said that “along with the resolution of the rule, we intend to resolve questions around the data that we gained and dispose of data that is no longer legally required to be filed. So, we look forward to concluding that this year.”

In the courts

The businesses urged Bessent to act quickly, especially in light of what it said are 12 federal cases challenging the validity of the CTA, including the NSBA case that it said is headed to the Supreme Court. In addition, the federal government has said in a court brief that the CTA’s removal of the BOI filing requirement for domestic companies was an executive‑branch decision that did not affect the CTA’s constitutionality.

“Given this legal uncertainty and the fact that domestic businesses are no longer subject to the CTA’s reporting requirements, the continued retention of their data serves no legitimate government purpose,” the letter said.

“The longer the Treasury Department delays, the greater the risk there will be misuse of this sensitive information,” the letter said. “Main Street businesses deserve certainty and to know their personal information will not be ‘warehoused’ indefinitely awaiting a new administration and a change in policy. The undersigned organizations urge you to act swiftly to protect American businesses by purging the CTA database and finalizing the BOI rule now.”

Treasury did not respond to a request for comment.

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