Legal with Leah: Corporate Transparency Act deadline approaching
Time is running out for thousands of farmers who may face steep fines and possible jail time for failing to…
Read MoreTime is running out for thousands of farmers who may face steep fines and possible jail time for failing to file their businesses with the federal government as part of new rules through the Corporate Transparency Act. Ohio Farm Bureau’s Associate General Counsel, Leah Curtis has details about the rules and upcoming deadline.
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Legal with Leah: Corporate Transparency Act reporting requirements
Corporate Transparency Act Deadline Looming
The Corporate Transparency Act: Reporting Requirements
Corporate Transparency Act reporting deadline remains January 1, 2025
Listen to Legal with Leah, a podcast featuring Ohio Farm Bureau’s Policy Counsel Leah Curtis discussing topics impacting farmers and landowners.
Ty Higgins [00:00:00] Time is running out for thousands of farmers who may face steep fines and possible jail time for failing to file their businesses with the federal government as part of new rules through the Corporate Transparency Act. New analysis by American Farm Bureau economists show more than 230,000 farms are required to file, but government data indicates less than 11% of all eligible businesses nationwide have actually done so. Let’s cover this with Leah Curtis, associate general counsel with Ohio Farm Bureau, for this Legal with Leah.
Ty Higgins [00:00:32] So earlier this year, you and I talked about this, the Corporate Transparency Act. And you gave us a reminder about these tips and some deadlines coming up. Let’s start with what the Corporate Transparency Act is and what it does mean for farmers.
Leah Curtis [00:00:47] So this law was passed in 2020. And the main point is to address money laundering. And I’ll remind everyone that Farm Bureau did oppose this law, lobbied against it, but it did pass with pretty strong bipartisan support in Congress. So the law requires most businesses to report information about their owners, and that would include farm businesses. And the intent here is to make it harder to hide assets and to commit financial crimes, particularly through the use of things like shell companies.
Ty Higgins [00:01:16] So who needs to file and what should they file?
Leah Curtis [00:01:20] Any business that was created by filing a document with the secretary of state or a similar office in the U.S. is going to have to report. So if you organized your farm as an LLC, as a corporation, those were filed with the secretary of state here in Ohio. And so you likely also need to file under the Corporate Transparency Act. You’ll need to report information about beneficial owners. And those are people that have substantial control over the company or own 25% or more of the ownership interests. And for both the business and the beneficial owners, it’s kind of basic information that you’re reporting: your names, addresses, tax I.D. number, and then copies of identification, like a driver’s license. I do want to note that sole proprietorships typically are not going to be required to file because they typically do not file paperwork with the secretary of state. But of course, everyone should talk to their own legal counsel and figure that out for their business individually.
Ty Higgins [00:02:14] And you and I are bringing this up again because the deadline to do this is just a couple of months away now.
Leah Curtis [00:02:20] We talked about this earlier this year. And the deadline is if your business was created prior to January 1, 2024, you have until January 1, 2025 to file this information. If you created a business sometime in 2024, you had 90 days from the date of creation to file this information. You should have gotten information about that. Hopefully you’re working with an attorney and they gave you that information. There is ongoing litigation over this law, but at this time, it does appear it’s going to remain in effect. So business owners should be making plans to get through this process. As you mentioned, there are very steep fines for noncompliance. There is possibilities of jail time. And so to be safe, we want to remind everybody that they really should get moving on this process.
Ty Higgins [00:03:07] What do you want to caution people about when it comes to some issues that have unfortunately popped up with this requirement?
Leah Curtis [00:03:14] So just like we see with income taxes every year, people are sending out fake emails and things to get people’s information. Same thing is happening here like it does with a lot of these types of activities. Your actual filing should take place on the Financial Crime Enforcement Network web page, and that is a federal government web page .gov at the end. Some of the fraud alerts that we’ve been made aware of from FinCEN include asking for a Form 4022. There is no such form, so please don’t fill that out. Or asking for information from a U.S. Business Regulations Department. I think we can all know that the government would never make such a simple name for an agency, so that one is also not a real department, and you should not be providing information to anyone with that name. If you get emails or correspondence unsolicited about CTA, you really should be wary of any links or attachments or QR codes. They might be attempting to gain your information and there is no fee for filing at FinCEN. So unless you’re paying an attorney, an accountant, somebody that you have contracted and are working with directly, they shouldn’t be asking you for money to file this information either.
Ty Higgins [00:04:25] We’re in the heart of harvest season. Farmers are busy. They’ve already done a lot of paperwork this year. They’re doing more paperwork because maybe they were impacted by the drought. There’s a lot going on. So how can farmers get some help in doing this particular reporting?
Leah Curtis [00:04:40] So of course, if you worked with an attorney to set up your business, that’s probably a really good place to go to have them assist you with this filing. They’re going to understand your business and your business structure, and they should be able to help you with this. You can do it yourself on the Financial Crimes Enforcement webpage. They have lots of resources there to explain it to you. And again, that website is fincen.gov. We also have a number of resources on our webpage, and we will link to, again, a Market Intel article from the American Farm Bureau Federation, our previous Legal with Leah. And then as well, our friends at OSU Extension have put out a bulletin as well that we will link to and people can check those out.
Ty Higgins [00:05:24] All those links and more on this Legal with Leah post. Leah Curtis, associate general counsel with Ohio Farm Bureau for this Legal with Leah. Thank you so much.
Leah Curtis [00:05:35] Thank you.
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