The Corporate Transparency Act requires most small businesses to file a report on the Financial Crimes Enforcement Network (FinCEN) of their owners with confirmed identification or face substantial fines and penalties. There are approximately 20 exceptions to this rule. However, if you filed business organizational documents with a state entity, you probably need to file the form. According to recent announcements from the U.S. Treasury and FinCEN, the requirement for a small business to report beneficial ownership information to the FinCEN will no longer be actively enforced or fined.

Enforcing the Corporate Transparency Act

Almost as soon as the law came out, it began facing numerous legal challenges. The filing deadline was delayed, then re-enacted, and then delayed again. Those supporting the rule believe the filings will help law enforcement identify fake companies and bad players more readily. Those against the requirement consider it government overreach and believe the information can pull from elsewhere.

FinCEN and the Treasury Department now say they will no longer enforce the law nor impose penalties for any firm that does not meet the current March 21st filing deadline. Does this mean the law is dead? Not technically, as the law is not rescinded. There is just no enforcement currently happening.

Small business beneficial ownership reporting

• If you have not filed your BOI form at www.fincen.gov, you will not be penalized or forced to do so at this time
• If you wish to file your report, the site is still available for you to do so
• Since the law is still in place, the requirements, penalties, and fines may be reinstated
• FinCEN will still be modifying requirements to try and identify questionable businesses, so there may be announcements in the future

You can see the full Treasury Department announcement on its website. For more information, visit the RRBB blog page or contact our RRBB advisors.