S-Corp President Brian Reardon is out with an op-ed in the Washington Examiner that breaks down just how onerous and poorly constructed the Corporate Transparency Act’s reporting requirements really are.
Starting next year, millions of small business owners will get a letter from a federal agency they’ve never heard of, telling them they need to comply with a law nobody’s told them about. Most, like reasonable people, will probably think the notice is a scam and throw it away.
How far reaching is the CTA? As the piece explains, the scope of the new reporting requirements is unprecedented:
Under the CTA, all newly formed corporations, LLCs, and other covered entities must report the personal information of their “beneficial owners” to the Financial Crimes Enforcement Network beginning next January. The following year, all covered entities, including all corporations, LLCs, charities, and other entities with less than $5 million in revenues and 20 employees, will have to do the same, starting an annual process that FinCEN estimates will result in over 32 million separate reports.
The good news is that Washington is starting to pay attention. A lawsuit brought forward by the National Small Business Association to block the CTA is in its final stages, and members of Congress have raised concerns over the rollout of the regulations. The bad news is that there’s no guarantee the courts will deliver a favorable ruling. Meanwhile, federal lawmakers appear to be more focused on the implementation of the CTA rather than killing it altogether.
Once millions of unsuspecting, law-abiding business owners hear they’re targeted by this sweeping information grab, we expect the phones will light up on Capitol Hill. With just five months to go until the CTA’s reporting requirements take effect, we’re going to do all we can to get the word out.