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Tuberville claims that Corporate Transparency Act means jail time for small business owners

U.S. Senator Tommy Tuberville (R-Alabama) recently wrote an editorial in Newsweek in which he warned that the Corporate Transparency Act will add yet another layer of bureaucracy for small businesses to have to deal with and if it passes into law it will result in some of them going to jail.

"The Corporate Transparency Act (CTA) is a classic example of intrusive big-government overreach," said Sen. Tuberville. "It places a new compliance burden on main street Americans with an LLC, and failure to comply comes with criminal penalties that could land you behind bars."

"The CTA requires individuals with "substantial control" over a company or an equity position of 25 percent or greater to disclose personal data with the Treasury Department's Financial Crimes Enforcement Network (FinCEN) – a government bureau most Americans have never heard of before," Tuberville continued.

"Unsurprisingly, large businesses with powerful lobbyists got a carveout in the law and do not have to comply with the CTA," explained Tuberville. "While the little guy has to struggle with all this red tape, LLCs with more than 20 employees and greater than $5 million in revenue do not have to file with FinCEN-another win for the special interest groups over We the People."

To read the editorial: https://www.newsweek.com/corporate-transparency-act-means-jail-time-small-business-owners-opinion-1894964

According to the U.S. Chamber of Commerce, the Corporate Transparency Act (CTA), aimed at combating illicit financial activity, went into effect on January 1, 2024. Under the act, small businesses across the United States need to file beneficial ownership information reports, also known as corporate transparency reports.

The CTA was developed to increase transparency in business ownership and curtail the use of anonymous shell corporations for tax fraud, money laundering, and other illegal financial activity. All small businesses that fall under the definition of a reporting company must file a beneficial ownership information report (BOIR) with the Financial Crimes Enforcement Network (FinCEN).

Publicly traded companies do not fall under the CTA, as they are subject to their own reporting requirements.

A beneficial owner is any individual who owns or controls at least 25% of an organization, or directly or indirectly exercises substantial control in any of the following roles:

They serve as a senior officer, such as a president, CEO, or general counsel.

They have the authority to appoint or remove senior officers, board members, or other similar roles.

They make important decisions concerning the company's business, finances, and/or structure.

To determine whether your business is required to file. Under the CTA, LLCs and corporations must file beneficial ownership information reports unless they qualify for an exemption.

Reporting companies established before January 1, 2024, have until January 1, 2025, to file their initial corporate transparency reports. Companies established between January 1, 2024, and January 1, 2025, must file within 90 days from the notification or public announcement of their formation, whichever date comes first.

https://www.uschamber.com/co/start/strategy/how-to-file-beneficial-ownership-report

Tommy Tuberville was elected to the U.S. Senate in 2020.

 

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