Originally set to come into effect in late 2022 or early 2023, The Financial Crimes Enforcement Network (FinCEN) has extended the implementation of the Corporate Tax Transparency Act (CTA) until January 1, 2024, via this release a few days ago. The details are below.
What is the CTA?
The Corporate Transparency Act (CTA) establishes uniform beneficial ownership information reporting requirements for certain types of domestic and foreign corporations, limited liability companies, and other similar entities created in or registered to do business in the United States. The CTA authorizes FinCEN to collect personal information of the entity’s organizers and owners and disclose it to authorized government authorities and financial institutions, subject to effective safeguards and controls.
Why Have the CTA?
The CTA and its implementing regulations are intended to provide essential information to law enforcement, national security agencies, and others to help prevent criminals, terrorists, proliferators, and corrupt oligarchs from hiding illicit money or other property in the United States.
This required reporting is outside of the scope of any corporate organization/formation documents and federal/state income tax or information filings. Lack of reporting or missed reporting can subject filers to both civil and criminal penalties.
Effective Dates and Forms
The final rules and regulations go into effect on January 1, 2024, and beneficial ownership information will not be accepted prior to that date. FinCEN has stated that it will publish the forms for completion well in advance of the filing effective date, which practitioners are anxiously awaiting to review. As per the information released so far, filers should expect to provide detail on the name and address of the entity, jurisdiction of principal business, foreign tax ID numbers, and, for company applicants and those considered beneficial owners, name and address, date of birth, as well as a unique identifying number from either state or other federal identification documents.
The tax teams at Wolf & Co. are continuing to monitor releases in this space and will provide updates on forms and reporting as they become available.
Please reach out to our international tax services team with any questions on this evolving matter.
RITA RYAN, J.D., LL.M.
Senior Manager, International Tax Services Team Lead
Wolf & Company, P.C.
255 State Street, Boston, MA 02109
Direct +1(617) 419-4202