On January 1, 2021, the Corporate Transparency Act (CTA) was enacted by Congress. The CTA is the largest anti money laundering legislation passed since 2001. The CTA created a new reporting requirement for businesses, which began on January 1, 2024, requiring any formally established business that is not subject to an exemption to file a Beneficial Owner Information Report (BOIR) with the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) bureau. These reporting requirements impact most businesses.
The CTA is designed to combat money laundering, terrorism financing, and other illicit activities by requiring disclosure. This information includes the identities of individuals who directly or indirectly own or control a significant interest in a business. While many businesses may not typically be associated with money laundering or terrorism financing, the CTA's reporting requirements are broadly applied and include ordinary small businesses across nearly every industry.
Willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision or attempted provision of false or fraudulent beneficial ownership information, may result in civil or criminal penalties, including civil penalties of up to $500 for each day the violation continues, up to $10,000, or criminal penalties including imprisonment for up to two years.
Stay up to date with relevant CTA developments by following Azarvand Tax Law on Facebook or LinkedIn. Please contact Azarvand Tax Law at 410-698-4005 or book a free consultation at AzarvandTaxLaw.com to get started on the Corporate Transparency Act BOI Report filing process for your business, or to assist you with any tax issues you or your business may be facing, including but not limited to tax collection, audits, or compliance checks.
About the Author. Tina Azarvand is a Tax Attorney and is the founder of Azarvand Tax Law. She assists businesses with preventing, defending, and resolving tax controversies with the IRS and local taxing authorities.
A version of this article was published in Salon Today .
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