Attorney Resource Center for the Corporate Transparency Act

Corporate Transparency Act (CTA)

Effective January 1, 2024

Attorney Resource Center

The Corporate Transparency Act (“CTA”) is effective January 1, 2024, and attorneys are understandably considering how to advise their clients on reporting requirements, penalties, and other details of the new law.  This CTA Attorney Resource Center contains a variety of resources including webinars, links to resources provided by the Financial Crimes Enforcement Network or “FinCEN,” and some resources provided exclusively to InterActive Legal subscribers.  The InterActive Legal Content Team will add resources from time to time to help you provide counsel to your clients who own or control entities that will be required to report under the CTA.

Resources provided by
InterActive Legal

Attorney News Blog:
FinCEN Updates its Beneficial Ownership Information FAQ Page

By Elizabeth Q. Boehmcke Esq.

On April 18, 2024, FinCEN updated its Beneficial Ownership Information Frequently Asked Questions page to include new questions concerning beneficial ownership through trusts, application of the rules to corporate trustees, and other topics.

New Questions D.14-D.16 focus on beneficial ownership of reporting companies through trusts…

New – FinCEN Response to National Small Business United Case

On March 4, 2024, FInCEN announced its response to the declaration by the Northern Alabama District Court that the Corporate Transparency Act is unconstitutional and declared that it would be suspending enforcement of beneficial ownership reporting deadlines against the plaintiffs in the case.  There was no mention of delaying the deadline as to any other person who may be required to report under the Act. Read the announcement here.

As widely expected, the Justice Department filed an appeal of the case on March 11, 2024.  Read the very brief appeal here.

New Development Regarding the Corporate Transparency Act

In National Small Business United v. Yellen, No. 5:22-cv-01448-LCB (N.D. Ala. Mar 1, 2024), the Northern District Court of Alabama ruled that the Act is unconstitutional on the grounds that it exceeded Congress’ legislative powers.  The Court also specifically enjoined the government from enforcing the Corporate Transparency Act against the Plaintiffs in the case, though there is no mention of whether the government can otherwise enforce the Act against others.  With the initial 90-day filing deadline for newly formed reporting companies approaching at the end of March, it seems probable that the government will appeal the ruling and either request a stay of the injunction or voluntarily announce a further delay in the reporting deadlines to prevent inconsistent enforcement issues.  A link to the memorandum opinion is available below.

Attorney News Blog:
Getting Ready for the Corporate Transparency Act: Prepare Now

By Elizabeth Q. Boehmcke Esq.

Will you and your firm be ready to deal with the challenges posed by the CTA and reap the rewards of increased confidence and trust of your clients? If you are like many attorneys, you are aware of the CTA and its requirements but do not yet feel fully prepared to grapple with it in practice. The exact approach you take in dealing with the CTA may vary depending on the size of your firm, your client base, and your capacity to take on additional work. This task list is suggested as a starting point to help you become better prepared.

New Development:  
HR 5119 passed December 12, 2023; Awaiting Senate action

The U.S. House of Representatives passed HR 5119, the Protect Small Business and Prevent Illicit Financial Activity Act, by an overwhelming vote of 420-1 on December 12, 2023.  If taken up in the Senate and passed as is, the bill would make certain important changes to the current reporting deadlines:

  • For businesses existing before January 1, 2024, the deadline for making an initial report would be extended to January 1, 2026;
  • For businesses created on or after January 1, 2024, the deadline for making an initial report would be extended to 90 days from formation.  This 90-day deadline would also apply to businesses created on or after January 1, 2025.  (An announcement from FinCEN on November 29, 2023 extended the deadline for companies created in 2024 to 90 days but had left the original 30-day deadline in place for companies created after 2024.)
  • The deadline for updated reports and changes would be extended to 90 days from the date of the change, instead of 30 days.

In addition, the bill contains a provision that, while somewhat unclear, may be aimed at preventing FinCEN from acting to allow reports “relating to the inability of the reporting company to obtain or identify information in the alternative to filing a report required under this subsection.”  This proposed new section 31 USC 5336(b)(1)(H) may prevent FinCEN from providing any relief to reporting companies who in good faith attempt to obtain the required information from beneficial owners.  Additional clarity as to the government’s intent would be welcome; however, for attorneys advising clients about the Corporate Transparency Act, careful consideration may be required to determine how the company will force compliance with its reporting requirements amongst its members, partners and associates if there will be no relief available to a reporting company that attempts but is unsuccessful at gathering information regarding beneficial owners.  You can read the bill here.

Webinar Sponsored by InterActive Legal, Peak Trust Company, and Shenkman Law

“Corporate Transparency Act: Deeper Dive”

by Jonathan G. Blattmachr Esq.Abigail E. O’Connor Esq.Chris Lauer Esq. and Martin M. Shenkman Esq.

Originally Aired on 12/18/2023

This program will delve deeper into dealing with the CTA and not just summarize the new rules. The focus will be on discussions of the panelists to present different points of view and different ideas.

Webinar Sponsored by InterActive Legal and Shenkman Law

“Are you prepared for the Corporate Transparency Act?”

by Jonathan G. Blattmachr Esq. Abigail E. O’Connor Esq. and Martin M. Shenkman Esq.

Originally Aired on 11/20/2023

This webinar reviews the highlights, requirements, and framework to understand and address the Corporate Transparency Act (“CTA”), but it will go much deeper than just summarizing the new rules. This program will provide practical step-by-step strategies for communicating with clients about the CTA.

Forbes Article

​​​​​​”​Act Before Year End: Corporate Transparency Act Is Coming!”

by Martin M. Shenkman Esq.

Published 11/14/2023 

InterActive Legal Advisor and webinar presenter, Martin Shenkman, has written this article for Forbes, highlighting the urgency and importance of estate planners understanding this soon-to-be-effective federal law.

This is an external site

InterActive Legal Subscriber Sample 2023 Year End Planning Letter

by InterActive Legal Attorneys

Published 11/27/2023

This is a sample letter that can be adapted and sent to clients that discusses both the Corporate Transparency Act and the imminent sunset of the increased estate and gift tax exemption and what steps clients need to take. 

Update November 29, 2023:  Today FinCEN announced an amendment to the final rules for beneficial ownership reporting with respect to reporting companies created from January 1, 2024 through December 31, 2024.  For reporting companies created during this timeframe, the reporting deadline for initial reports is extended from 30 days to 90 days from the formation of the company.  However, for reporting companies formed on or after January 1, 2025, the deadline for filing initial reports goes back to 30 days from formation of the reporting company.  Note that FinCEN did not change the 30 day deadline for reporting changes, which would be effective for reporting companies formed in 2024 and thereafter.  InterActive Legal has updated the Sample Client letter to reflect this amendment to the final rules.  You can read the announcement from FinCEN here.

The Sample 2023 Year End Planning Letter is for
InterActive Legal subscribers ONLY

If you are an InterActive Legal subscriber, please log in to download the sample letter.

Resources from InterActive Legal and LawEasy

by Jonathan G. Blattmachr Esq. and Martin M. Shenkman Esq.

Introduction to the
Corporate Transparency Act

Recorded on 11/22/2023

Corporate Transparency Act:
Steps to Take in 2023

Recorded on 12/4/2023

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