08 November 2024
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As the January 1, 2025, filing deadline for the Corporate Transparency Act (CTA) approaches, hotel owners, developers, and investors should be prepared to meet the new federal requirements for business transparency. Effective January 1, 2024, the CTA requires most U.S. business entities to submit detailed ownership information to FinCEN or face penalties up to $10,000. The article below by JMBM’s Taxation, Trusts & Estates Department outlines key CTA requirements, filing deadlines, and essential steps for compliance.
Corporate Transparency Act:
Upcoming January 1, 2025 Filing Deadline
by
JMBM’s Taxation, Trusts & Estates Department
Overview of the CTA Requirements and Compliance Obligations
The CTA, which became effective January 1, 2024, introduces extensive federal disclosure obligations for all businesses that do not qualify for an exemption, regardless of when formed. These new reporting requirements are stringent and can trigger multiple filings in a single calendar year exposing noncomplying individuals and entities to both civil and criminal penalties. Pursuant to the CTA, the Financial Crimes Enforcement Network (“FinCEN”) is authorized to collect beneficial ownership information (“BOI”) with respect to business entities (referred to as “Reporting Companies”) formed or registered to do business in the U.S. and disclose such BOI to various federal and state agencies (including the IRS).
In this regard, any Reporting Company that does not qualify for an exemption from reporting must comply with these reporting obligations irrespective of whether it existed before or after January 1, 2024. Penalties for noncompliance include fines of up to $10,000 – making early compliance essential for avoiding these penalties. CONTINUE READING →