U.S. Lawmakers Ask For One Year Delay For Corporate Transparency Act Requirements

On Nov. 5, more than three dozen U.S. lawmakers sent a letter to the Financial Crimes Enforcement Network (FinCEN) requesting a one-year delay of the Corporate Transparency Act’s (CTA) fast-approaching reporting deadline. More than 33 million entities would benefit from the delay, the letter noted. That number includes companies in the industrial metals industry.

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 and several other business trade organizations, including the S-Corp Association, have fought vigorously to roll back these burdensome requirements.

The letter sent on Nov. 5 was signed by 44 members of the U.S. House of Representatives who were organized by Rep. Lisa McClain (R-Mich.). It cited ongoing concerns over businesses’ lack of awareness about their new compliance obligations, confusion surrounding several ongoing legal challenges, and other critical issues.

The letter, available at this link, also argued a one-year delay in implementation is “in line with Congressional intent” since U.S. lawmakers “explicitly called for a reporting deadline of ‘not later than two years after the effective date of the regulations’ for existing entities.” The letter said that “timeframe was designed to give affected entities sufficient time to learn of, understand, and comply with the new reporting regime.” According to FinCEN, entities affected by the CTA are likely to spend at least $21.7 billion in the first year to comply with CTA requirements and $3.3 billion each year going forward.

Read more at this link.