Summary
The Corporate Transparency Act has been ruled Unconstitutional by a Federal Court.
Ironically the Financial Crimes Enforcement Network (FinCEN) intends to continue enforcing this Unconstitutional law which includes civil penalties of $500/day ($591/day adjusted) and criminal penalties of up to 2 years in prison.
Therefore, the new administration must take immediate action to abolish this Act otherwise starting January 1, 2025, millions of innocent small business owners subjected to targeted lawfare and imprisoned for failing to comply with a Unconstitutional law.
Corporate Transparency Act
The CTA was enacted in 2021. The CTA applies to corporations, limited liability companies, and other similar entities that are formed or registered to do business in the United States. The CTA requires reporting of the names, addresses, and identification details of beneficial owners.
When must reports be filed:
-
Existing companies: Companies that existed before January 1, 2024 must file their initial report by January 1, 2025.
-
Newly created companies: Companies created or registered in 2024 must file within 90 calendar days of receiving actual or public notice of their creation or registration.
Failure to comply with the CTA can result in criminal and civil penalties, including:
- Monetary fines of up to $10,000
- Imprisonment for up to 2 years
- A $591 per diem penalty, adjusted for inflation
Act Ruled Unconstitutional
On March 1, 2024, the federal district court for the Northern District of Alabama issued a memorandum opinion, National Small Business United d/b/a National Small Business Association, et al. v. Yellen, Case No. 5:22-cv-01448 (N.D. Ala.), granting summary judgment for the plaintiffs holding the Corporate Transparency Act, 31 U.S.C. §5336 (2024) (the CTA or the act) unconstitutional and enjoining the Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN) from enforcing the CTA against the plaintiffs. The ruling has provoked similar lawsuits and substantial media coverage.
FinCEN is wasting tax payer dollars appealing that case and fighting other lawsuits all over the country challenging this Unconstitutional Act.
The American people are sick and tired of paying the bill for the government to engage in lawfare against its US citizens to enforce Unconstitutional laws that only seek to tax small businesses and throw small businesses owners in prison for failing to comply with a law ruled Unconstitutional.
The Government should be reducing regulations on small businesses, not creating new Unconstitutional regulations that favor large businesses and penalize small businesses with penalties of imprisonment for failing to comply.