The Corporate Transparency Act (CTA) was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the beneficial ownership information (otherwise known as BOI) of certain entities from people who own or control a company.
The CTA is not a part of the tax code. Instead, it is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping and report filing on certain types of financial transactions. Under the CTA, BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), another agency of the Department of Treasury.
While many larger businesses are exempt from the BOI reporting requirements, most small businesses are required to make an initial filing in 2024 and file to report significant changes of ownership.
It is estimated that more than 32 million businesses will be required to comply with this reporting requirement beginning January 1, 2024. The intent of the BOI reporting requirement is to help US law enforcement combat money laundering, the financing of terrorism, and other illicit activity.
More information about Beneficial Ownership Information Reporting can be found by clicking the link below.
DGPerry encourgages business owners to consult with your legal council to determine your filing requirements and assist you in complying with this new law.