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The Small Business Development Center at the College of Staten Island presents its 12th Annual Federal & State Tax Forum for 2024. Presented by Warren M. Bergstein, CPA, and Jack Gold, CPA, Partners in the Accounting Firm of Adelman, Katz & Mond LLP.

In 2021 Congress passed The Corporate Transparency Act ("CTA") to identify bad actors and fight various illegal activities, including laundering money and providing funding for terrorists. CTA specified that various business entities would need to file information with the Financial Crimes Enforcement Network (FinCEN) identifying their primary owners. The final regulations were recently issued and encompass more businesses than previously anticipated.

Who Is Affected

CTA filing requirements impact more business entities, including domestic and foreign privately held entities that are incorporated, organized, or registered to do business in a U.S. state.

The following entities are exempt:

  • Companies required to report to the SEC

  • Insurance companies

  • Tax-exempt entities

  • Companies categorized as banks, credit unions, brokerages, venture capital advisors, public utilities, inactive entities, accounting firms, and some others

  • Large operating companies which meet all three of these requirements:

  • 20 or more full time employees in the US

  • $5,000,000 or more in gross receipts or sales in the US (as reported on prior year’s income tax return)

  • Physical office premises in the US

Subsidiaries of exempt entities are also considered exempt.  Note that exemption – or lack thereof – is not a one-time determination.  An entity that subsequently fails to meet the above requirements loses its exemption, while an entity that later meets the stated requirements can gain exemption.

What Needs to Be Filed

FinCEN has not yet issued the required forms, but

  • BOI:  Beneficial Owner Information – this provides personal information of any individual who holds at least 25% of the entity’s assets and/or exercises substantial control over its activities.  This will include:

When Filings Are Due

  • Entities formed prior to January 1, 2024:  December 31, 2024

  • Entities formed on or after January 1, 2024:  30 days following filing of formation documents

Note that this is expected to be an annual filing requirement.

What Else to Know – Penalties

There are severe penalties for non-compliance and providing false information.  Reporting violations are subject to a fine as high as $10,000 and/or imprisonment for up to two years.  Unauthorized disclosure or use violations are subject to a fine of up to $250,000 and/or 5 years in prison, in addition to the penalties for any other crime involved.

What’s Next?

Your Adelman, Katz & Mondo CPA can help you ensure that you are compliant with the new CTA requirements.  While we expect to contact most clients who may be impacted, we invite you to reach out if you have any questions or concerns.

Adelman Katz & Mond LLP

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Suite 1801

New York, NY 10036

Copyright © 2023 Adelman Katz & Mond LLP, All rights reserved.

To learn more about CTA and other tax issues, register for the Tax Forum, Thursday, January 11, 2024 @ 10:00am via Zoom



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