This article was originally posted on Steve Leimberg’s Business Entities Email Newsletter Archive Message #283.
The Corporate Transparency Act (“CTA”) is scheduled to be effective January 1, 2024, and there are important steps that should be considered before the end of 2023. The prudent step is to assume the CTA will in fact become effective as the law presently provides for. That being said, it is hard not to ponder the reality of the CTA, given the lack of timely advice by the Financial Crimes Enforcement Network, Department of the Treasury (“FinCEN”, which the authors also sometimes refer to as “the Treasury Department” in this newsletter), the incredible unfairness and burdens it will create, and the tendency of the government to allow delays in the implementation of complicated legislation where there is such a lack of guidance.
Many wonder how the Treasury Department will even be able to keep up with this new CTA disclosure law, which calls for an expected “32.6 million initial filings in Year 1” and 5 million additional filings each year in “Years 2-10” thereafter, with the vast majority of these filings being required to include information on multiple individuals and entities, copies of driver’s licenses or passports, personal residency and other confidential information
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