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**Corporate Transparency Act: The Tax and Business Community’s Response**

A 2021 law, the Corporate Transparency ActÔÇöor CTAÔÇöwhich requires reporting companies to file reports with FinCEN, the Financial Crimes Enforcement Network, is getting new looks from the tax and business communities. HereÔÇÖs what the commotion is aboutÔÇöstarting Jan. 1, 2024, many companies will be required to report information to the U.S. government about who ultimately owns and controls them. Many say theyÔÇÖre not ready.

**Understanding the Background of the Legislation**

The House passed the initial version of the CTA in 2019 with a 249 to 173 vote. It didnÔÇÖt make its way to a full Congressional vote until the next year, when it was added to the fiscal year 2021 National Defense Authorization Act (NDAA). The House version passed by a vote of 295-125 and a Senate version passed by a vote of 86-14. Eventually, the final version of the bill was agreed on by the House and Senate in December 2020, where it was promptly vetoed for, among other things, not repealing section 230 of the 1996 Communications Decency Act (two other sticking points included increases to stimulus checks to $2,000 and starting an investigation into voter fraud).

When the bill went back to Congress, Senate Majority Leader Mitch McConnell (R-KY) urged his colleagues to overturn the veto, saying, ÔÇ£For the brave men and women of the United States armed forces, failure is not an option. So when it is our turn in Congress to have their backs, failure is not an option here either. I urge my colleagues to support this legislation one more time.ÔÇØ The veto was quickly overridden with a House vote of 322-87 and a Senate vote of 81-13 on January 1, 2021.

**Navigating Through the Controversy**

As the date approaches, tax and accounting professionalsÔÇöas well as small business advocacy groupsÔÇöhave expressed concern about the scope of the rules and the ability of small businesses to comply. As a result, there have been pushes to contact members of Congress to delay or repeal the law, and at least one major lawsuit filed against Treasury.

**legal Challenges and Legislative Amendments**

On Nov. 15. 2022, the National Small Business Association (ÔÇ£NSBAÔÇØ) filed a lawsuit challenging the reporting requirements set forth in the CTA and the accompanying regulations. The complaint names Treasury Secretary Janet Yellen, the U.S. Treasury Department, and FinCEN Acting Director Himamauli Das as defendants. The case is moving through the courtÔÇöno decision has been reached.

The bill sat, relatively untouched, for nearly three years. But as the effective dateÔÇöJan. 1, 2024ÔÇöticked closer, concerns about the impact of the new law have grown. A bipartisan bill introduced by Rep. Zachary Nunn (R-IA) would extend the deadline for companies to report ownership information to the to two years instead of one year. New companies must file their initial ownership report within 90 days. Companies must report updates or changes in ownership within 90 days. That bill passed 420-1 on Dec. 12, 2023.

**Upcoming Steps and Assistance from AI legalese decoder**

As of today, nothing has changed. The rules are still the same. AI legalese decoder can help individuals and businesses interpret complex legal provisions and navigate the implications of the Corporate Transparency Act. The AI tool can provide insights into compliance requirements, track potential legislative amendments, and offer guidance on reporting obligations. Additionally, it can monitor court cases related to the CTA and provide updates for informed decision-making.

**Obtaining Additional Information**

FinCEN has a BOI webpage, www.fincen.gov/boi. You can also subscribe here to receive updates via email from FinCEN about BOI reporting obligations. And, of course, the Forbes tax teams will continue to provide updates.

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