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May 10, 2024 | Corporate Transparency Act - Required Reporting for Business Owners





This is a reminder about the Corporate Transparency Act (CTA), previously discussed in our winter newsletter.  The CTA requires the disclosure of beneficial ownership information for certain companies.  Beneficial owners are individuals who exercise substantial control over a reporting company or who own or control at least 25% of the ownership interests of the company.

 

The purpose of reporting this information is to aid US law enforcement in combatting money laundering, the financing of terrorism, and other illicit activity. Beginning in January 2024, the CTA required the disclosure of beneficial ownership information.  The reporting of this information is not handled through the IRS, but rather through the Financial Crimes Enforcement Network (FinCEN), which is a different agency within the Department of the Treasury.  Companies that were created by the filing of a document with a Secretary of State or any similar office under the law of a State, among others, are required to report under the CTA.  

 

Reporting under the CTA is done once unless there is a change to the information reported on the initial report concerning the company or its beneficial owners.  Changes must be filed within 30 days of when the change occurs. 

 

While FinCEN began accepting information reports as of the beginning of 2024, the filing for companies created and/or registered before January 1, 2024 is not due until January 1, 2025.  Entities created and/or registered in 2024 must file within 90 days of registration and entities created after December 31, 2024 must file within 30 days. Noncompliance can result in criminal and civil penalties. 

 

Refer to the CTA regulations and the FinCEN website for more information.  Before your applicable due date, you can go to https://boiefiling.fincen.gov to file your report.

  

For more information, please contact one of the experienced tax professionals at Bormel, Grice & Huyett, P.A. at 301-953-3259 or 410-792-7259

 

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