Hi

Before Trump's second term, we were all worried about what FinCEN was going to require. The Financial Crimes Enforcement Network of the federal government had imposed a program where if you owned a little company of any type (corporation, LLC, or limited partnership) you had to register all of the “beneficial owners” of the company in 2024.

Court orders kept pushing the time back, until it was after Trump was inaugurated in 2025. The penalties for not registering were huge. They were draconian. The ongoing requirements after you originally registered were nearly impossible to comply with, and the penalties for not complying were big enough that the federal government could basically destroy any small business it wanted to go after.

In my opinion, FinCEN was nothing more than a way that the government could destroy any small business that it decided it wanted to go after. It was a weaponization of the government against small business that didn’t act politically correct. Call that a conspiracy theory, but it is clear to me that that was what was happening. It was a huge overreach by the government.

People keep asking me if FinCEN is dead or not. The company registration requirements were killed once Trump came into office, but FinCEN is alive and well. If you registered with FinCEN under their beneficial owner’s requirements, you can’t “unregister.” They have your information.

They actually don’t have any information they didn’t already have, but you just delivered it in a nice package for them. I got my FinCEN number personally but never registered any of my companies.

FinCEN is still very active doing what they were created to do. They monitor the BSA.  No, not the Boy Scouts of America – the Bank Secrecy Act. They track financial transactions and catch money laundering. They weren’t created to harass mom and pop shops. I wouldn’t be surprised if we haven’t seen the last of the Corporate Transparency Act, which required the beneficial ownership registration, but for now it is dead – Happy Day!

New Registration Requirement

FinCEN is implementing a new regulation requirement that went into effect March 1, 2026, dealing with real estate.   

It’s called the Residential Real Estate Reporting Rule. It’s supposed to catch money laundering in the US residential real estate world. It won’t be a big part of your world, but you should know about it.

The criterion for registration says: 

1. Only residential real estate is involved. That is family homes up to four units and vacant land to be used for residential development.  
2. The transaction has to be a cash deal. If it is financed, then there is no need to report it. 
3. The buyer has to be an entity such as an LLC. 

You only have to report if all three of these criteria are met.

Since 2016 FinCEN has had real estate disclosure rules known as “geographic targeting orders.” They only applied in a few cities such as New York and Miami. The registration requirements that went into effect March 1^st basically just expanded the existing requirements to nationwide compliance.

The Treasury Secretary under Biden, ​Janet Yellen, ⁠has said as much as $2.3 billion was laundered through U.S. real ​estate between 2015 and 2020, and stopping this is high priority. $2.3 billion is peanuts compared to the fraud being committed in the government programs in Minnesota (estimated up to $19 Billion), and the estimates go into the hundreds of billions if you take in just California, Washington, and Massachusetts.

FinCEN Smackdown

The Pacific Legal Foundation brought a case against FinCEN and the real estate reporting requirements claiming that the reporting requirements exceeded FinCEN’s statutory authority.

On March 19^th, U.S. District Judge ​Jeremy Kernodle in Texas ruled that the real estate reporting did in fact exceed FinCEN’s authority.

He ruled that FinCEN failed to prove that all non-financed transfers to entities are "categorically suspicious." He noted that many people use LLCs or trusts for legitimate reasons like privacy, liability protection, or tax planning.

The current reporting requirement doesn’t affect many real estate investors. The judge warned that if the government could label an entire category of normal commerce as "suspicious" without specific proof, it would give FinCEN unlimited, far-reaching power over almost any transaction imaginable. I agree with the judge.

Basically, the reporting requirement has halted. The government says they will appeal, but the FinCEN website says compliance has been suspended. 

I will keep you posted on future issues,