Deadline Looming to File for Corporate Transparency Act

(NASHVILLE, TN) — Have you filed the required information for the anti-money laundering law known as the Corporate Transparency Act?

If you haven’t done so, you are surely not alone. According to American Farm Bureau, less than 11 percent of the 230,0000 farms required to register by the January 1st, 2025 deadline have done so yet. And failure to register can come with steep fines or jail time. The question is, who exactly has to file? Well, pretty much anyone with a business.

Chad Hanson, President of Corporate Farmer Inc. in Mason City, IA shares more details on who exactly needs to file and why. “So anybody with basically a separate entity outside of like a trust needs to file this by the end of the year,” says Hanson. “Otherwise, there are some pretty significant penalties in place now. There’s been, you know, some talk and I know places like you have tried to get the word out on this and some bankers, us as tax professionals have tried to communicate it to our clients. But it’s something that I still think that a lot of people aren’t aware of.”

According to the American Farm Bureau, “the Corporate Transparency Act was passed in 2021 to combat money laundering and organized crime funding. The CTA requires that registered businesses register any “beneficial owner” of the company with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The BOI filing requirement applies to any small business that files an incorporating document with their state business authority to conduct business in the United States, including corporations, limited partnerships or limited liability companies (LLCs). The FinCEN classification of a “small entity” is having less than 20 employees and under $5 million in cash receipts.”

As it stands currently, most farms and ranches operate as sole proprietorships but there are many that operate as a corporation, partnership or something equivalent to that. Hanson added in his comments that he thinks there could be a deadline extension and many others are hopeful that the CTA requirements might change or go away all together, pending various litigation and more.

“I think as we get closer and closer and continue to see the numbers where they’re at, I think it’s more and more likely that this can gets kicked down the road,” says Hanson. “And maybe there’s an extension. There’s also, you know, a lot of court cases out there to try and get it overturned because, you know one thing that we’ve communicated to our clients is, who wants their information out in another form or another avenue for the bad guys to try to crack into? And so there’s some good reasons, I think, why we’re hopeful. And I think a lot of people in our situation are hopeful that this could all change and maybe even go away, whether it’s through future legislation or these court battles that are going on. But at this point in time, it’s something that needs to be done here pretty soon.”

For now though, Hanson says, you need to pay attention to the current January 1st, 2025 deadline and consult your banker, lawyer or tax professional if you have any questions.

Find more information as well online by visiting the Market Intel page of the American Farm Bureau: https://www.fb.org/market-intel/corporate-transparency-act-deadline-looming

***Hear the full conversation with Chad Hanson on the Tuesday, October 22nd, 2024 episode of Agriculture of America (AOA), starting at the 21:30 mark of the podcast linked below.

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