MSCI Supports Amendments To Delay Corporate Transparency Act
U.S. Sens. Tim Scott (R-S.C.) and James Lankford (R-Okla.) plan to offer amendments to the fiscal year (FY) 2025 National Defense Authorization Act — a piece of legislation that Congress must pass this year — to delay implementation of the Corporate Transparency Act (CTA) for one year.
The CTA, as Connecting the Dots has explained previously, requires nearly every U.S. business to report, and to continuously update, information regarding their beneficial owners. The law includes civil and criminal penalties of up to $10,000 and two years of jail time for failing to report this information. These penalties could apply even in cases that amount to nothing more than a paperwork violation.
The Metals Service Center Institute (MSCI) and more than 130 other trade groups wrote a letter last week supporting the senators’ efforts.
The letter, available at this link, noted, “Although filing under the CTA began at the start of this year, only a few million businesses have registered while an estimated 28 million covered small businesses have yet to file. This compliance rate of less than 10 percent is a direct result of the general lack of awareness among business owners regarding the new rules.” The letter concluded that, “absent a delay, millions of law-abiding citizens will be at risk of steep fines and criminal penalties come the end of this year.”
The CTA originally was enacted as part of the fiscal year 2021 NDAA, so it makes sense to initiate a delay using this year’s defense spending bill.
In related news: The U.S. 11th Circuit Court of Appeals announced it will hear the lawsuit challenging the CTA on Sept. 27, 2024. Additionally, in recent testimony on Capitol Hill, U.S. Treasury Secretary Janet Yellen said it is unlikely the Biden administration will push back the CTA’s filing deadline. Secretary Yellen also noted the federal government has received approximately 2.7 million filings so far, a fraction of the estimated 31 million businesses that must file by the deadline of January 1, 2025.
While MSCI is hopeful the legal challenge to the CTA will be successful, it urges industrial metals companies to proceed as if the court’s ruling will not come until after the filing deadline. Click here for information about how to prepare in the event the CTA is allowed to move forward.