Last Monday, December 23, the Fifth Circuit Court of Appeals stayed the nationwide injunction issued by a Texas federal district court against enforcement of the Corporate Transparency Act (“CTA”). English translation: The CTA is back on.
Rather than sticking to the original January 1 deadline, the Financial Crimes Enforcement Network (“FinCEN”) has extended the reporting deadline to Monday, January 13.
If you are an affected LLC, S corporation, or C corporation (most small businesses are) and you do not report information regarding the entity and the “beneficial owners” you will be subject to fines of up to $591 a day and potential federal felony prosecution come January 14.
For more background on the CTA read this. Then read this update. Please take this seriously.
My recommendation: Ask your accountant, attorney, or financial advisor if they can help (the answer will likely be “no”). At Mason Law, PC, we made the decision that we could not efficiently offer reporting services. I have been advising people to use Perfect Form, LLC. Mason Law, PC has used them. The pricing is quite reasonable. The data entry portal is very user-friendly. And, no, I don’t have any connection with them. Perfect Form, LLC.
The CTA was enacted over a presidential veto on December 11, 2020. It was actually buried deeply in the huge National Defense Authorization Act of 2021. Supporters say that it will be a tool for policing money laundering, terrorist financing, and other nefarious financial conduct. It will also bring the US in line with other European-style enforcement measures.
We aren’t Europe. Over 32 million small businesses, the vast majority of whom are law-abiding, will be forced to divulge information and keep it updated. I believe in cracking down on money laundering and such, but is this overkill?
If you agree, take it up with Senators Tillis and Budd. Congress could always repeal it (or tighten it up) and President Trump might be amenable to signing the repeal (after all, he was the president who vetoed it the first time around).
