The Financial Crimes Enforcement Network (FinCEN) has revised its reporting rule under the Corporate Transparency Act, significantly narrowing the scope of companies required to report beneficial ownership information. The new interim final rule, released by the Treasury Department, applies only to foreign-reporting entities, reducing the number of companies affected from an estimated 32 million to about 12,000 annually. This change has been criticized by tax practitioners who argue that it undermines the original intent of the Corporate Transparency Act, enacted as part of the broader Anti-Money Laundering Act of 2020 within defense authorization legislation. The Act aimed to combat money laundering and other financial crimes by creating a comprehensive database of company ownership. The revised rule allows foreign companies to avoid reporting by establishing U.S. subsidiaries, and U.S.-owned foreign companies are also exempt. The lack of a centralized federal database may lead states to develop their own reporting systems, potentially increasing the complexity and cost for businesses operating across different states. The rule change has paused a related lawsuit in the Fifth Circuit, and future legal challenges may arise from various stakeholders.