07 November 2023
In 2021, Congress passed the Corporate Transparency Act in order to combat money laundering and other illegal activities. The CTA goes into effect on January 1, 2024, and requires almost all businesses to file a report with FinCEN identifying their beneficial owners. JMBM’s Taxation, Trusts & Estates Department has written the below article detailing the steps businesses should take to prepare for this new law.
Preparing for the Corporate Transparency Act
Disclosure of Beneficial Ownership Information to FINCEN
by JMBM’s Taxation, Trusts & Estates Department
New federal disclosure requirements for your businesses and entities will become effective January 1, 2024 – the reporting requirements are burdensome, can be triggered multiple times in a single calendar year and are subject to both civil and criminal liability. Accordingly, you should prepare to comply with the new law now.
Specifically, in 2021, Congress passed the Corporate Transparency Act, which can impact (subject to certain exceptions) essentially all businesses and investment vehicles (including, but not limited to, partnerships, limited liability companies and corporations). The CTA itself aims to combat money laundering, terrorism financing and other illegal activities by requiring entities to disclose information about the individuals who beneficially own and control them to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
In that regard, the CTA authorizes FinCEN to collect beneficial ownership information (“BOI”, as discussed below) and disclose it to various federal and state agencies (including the Internal Revenue Service). Accordingly, if you own or control an entity, then you may be subject to these requirements.
Beginning on January 1, 2024, most U.S. entities will be required to file a report with FinCEN identifying the beneficial owners of such entity (inclusive of driver’s license and/or passport), in addition to (among other things) the reporting entity’s address, jurisdiction and taxpayer identification number (TIN). Reports will be filed electronically through FinCEN’s filing system. CONTINUE READING →