Solo and Small Firm

The Practitioner VOLUME 30, ISSUE 1, SPRING 2024

THE CORPORATE TRANSPARENCY ACT GOES INTO EFFECT JANUARY 1, 2024 SOME IMPORTANT POINTS TO KNOW

C. Margaret Tritch*

As of January 1, 2024 there is a new federal reporting regime with the Financial Crimes Enforcement Network or FinCEN as it is referred to. The new regime took effect Jan 1, 2024, and the new forms were only made available on New Year’s Day. Up until December 21, 2023, the reporting details were still being finalized.

CORPORATE TRANSPARENCY ACT (CTA) COMPLIANCE

The impetus of the new reporting regime comes from the Corporate Transparency Act that was passed by Congress back in 2021. It is designed to bring the U.S. into compliance with international standards for anti-money laundering rules. The U.S. Government, FinCEN to be specific, will require the individuals behind companies operating in the U.S. to report various information about themselves. Its intention is to stop money laundering, illegal activities, and tax evasion that heretofore is believed to have been done by opaque corporate structures. The impact is, however, far reaching.

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