GAO Highlights Critical Gaps in CTA Interim Final Rule

The U.S. Government Accountability Office (GAO), the investigative arm of Congress, often called the congressional watchdog, spoke out against the U.S. Treasury Department’s interim final rule narrowing the Corporate Transparency Act (CTA), warning that the now-gutted law could open the door to fraudulent activity.

In its May 29, 2026 report, the GAO highlighted the “resulting gap in ownership information” arising from the interim rule, exempting “99 percent of entities that were previously required to report”. The gap in reporting obligations poses significant risks of fraudulent activity, as most U.S. based shell companies are now exempt from reporting ownership information to FinCEN.

The GAO concluded its report by recommending actions that the Treasury Department could take to address risks such as illicit actors using corporate structures to launder criminal proceeds.

As a quick refresher, Congress enacted the CTA in 2021, originally requiring millions of entities to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. However, after several lengthy legal battles reaching all the way to the Supreme Court, FinCEN severely hamstrung the law when it issued an interim final rule in March 2025 largely eliminating the reporting requirements for almost all entities.

Please see below for our previous updates on the CTA:

• • Corporate Transparency Act Obligations for U.S. Companies Are No More
  • CTA: Clear Deadline, Unclear Future
  • SCOTUS Hands Down CTA Decision — FinCEN Says Reporting Requirements Remain on Pause
  • CTA Reporting Paused—Again!
  • Corporate Transparency Act Injunction Lifted, Deadline to File Extended
  • CTA Update: U.S. Government Appeals Injunction & FinCEN Issues Guidance
  • Upset in the 11th Hour: Corporate Transparency Act Halted, for Now
  • FinCEN Engages in Outreach as CTA Deadline Looms
  • FinCEN Issues Update to Corporate Transparency Act
  • The Corporate Transparency Act: Will it Impact You?