A recent survey by the National Federation of Independent Business revealed a significant lack of awareness among businesses regarding the Corporate Transparency Act (CTA) reporting requirements. The CTA, set to take effect on January 1, mandates that businesses with 20 or fewer employees and revenue under $5 million report personal information about owners, board members, and other key figures, with potential civil and criminal penalties for non-compliance, including fines up to $10,000 and two years of imprisonment. Despite calls from nearly 70 trade organizations, such as the S Corporation Association and the Small Business & Entrepreneurship Council, for a one-year delay in implementation, the CTA remains on course, prompting concerns about the unprecedented scope of data collection and the urgent need for widespread education among affected businesses.
The American Institute of Certified Public Accountants (AICPA) has been a vocal critic of the CTA, citing a lack of awareness among businesses, the burdensome impact on small enterprises, and the potential for unauthorized legal practices by non-attorney practitioners. The AICPA and trade organizations advocate for a one-year delay to address these challenges, providing both FinCEN and businesses the necessary time to improve the regulatory framework, mitigate cost concerns, and ensure a smoother transition to compliance.
In response, legislative efforts, including bills introduced by House Financial Services Chair Patrick McHenry, seek to delay CTA rules until finalized and ensure accountability within FinCEN. Additionally, a bipartisan bill proposes a one-year delay in FinCEN’s beneficial ownership information (BOI) requirements to allow businesses more time to comply with the impending regulatory changes.
Read more: https://lnkd.in/eMeK_H-5
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