The Main Street business community came out in force today calling on Congress to adopt a one-year delay of the Corporate Transparency Act as part of this year’s National Defense Authorization Act. The effort, led by the Main Street Employer’s coalition and backed by more than 135 of its trade association allies, is in support of a pair of NDAA amendments. As the letter explains:

 Amendments sponsored by Senators Tim Scott (#2169) and James Lankford (#2831) would provide the business community and federal regulators additional time to educate millions of small business owners regarding the CTA’s new reporting requirements and …

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Notable Developments

• Appeals court sets hearing date
• Yellen grilled by House lawmakers
• New FinCEN guidance expands CTA’s reach

Legal Update

The Eleventh Circuit Court of Appeals announced a hearing in NSBA v Yellen, the case challenging the constitutionality of the CTA, will take place on September 27. While the court is working under an expedited timeline, that date is just three months ahead of the year-end filing deadline for existing entities.

To recap our latest alert, the total number of pending CTA challenges is currently at six nationwide:

• Massachusetts: BECMA et al v Yellen (5/29/2024)
• Texas: NFIB et al …
  
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Tax Notes published a good summary of the state of play regarding the Corporate Transparency Act in last week’s edition, including highlighting the multiple lawsuits filed against the law and the several bills introduced to either delay or repeal the onerous new reporting regime. That said, a couple of items in the article caught our eye that are worth clarifying.

Compliance Costs

The article notes:

According to FinCEN estimates, businesses with simple beneficial ownership structures will spend about 90 minutes on average to fill out their paperwork and about 40 minutes to update it. Companies with more complex ownership structures could spend …

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With the Corporate Transparency Act in effect for several months now, the House Small Business Committee convened to discuss how the rollout of the new law is going. The short answer – not so good.

The hearing featured testimony from three small business stakeholders who covered everything from compliance costs to legal and cybersecurity risks posed by the reporting requirements.

The first witness was Carol Roth, whose advocacy on behalf of the Main Street business community we’ve covered previously. Asked by Congressman Dan Meuser whether Treasury had reached out to affected …

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