Haynes and Boone, LLP Partner Lauren White was quoted in an Accounting Today article after a ruling on the Corporate Transparency Act further confused both the small businesses it affects, and the professionals who are trying to guide them through it.
"With cases already in progress that question the constitutionality of the CTA, I expect a good number of other cases will be filed," said White, co-chair of the business planning and tax practice group at Haynes Boone.
"People forget that this was bipartisan legislation designed to bring the U.S. to where other countries are," she said. "If the CTA is ultimately deemed unconstitutional, then I expect Congress will step in and tweak it to address any constitutional concerns. In the meantime, I recommend affected companies to file initial reports toward the end of the year. For pre-2024 entities, businesses have to decide how long they are willing to wait. For companies that have complex structures or have third-party owners that need to collect information from various sources, it will be very hard for them to spend the time and resources on this now. If there are more long-term adjustments to the rule, it will be a matter of timing and effort at this point."
"The penalties are $500 a day, or $591 adjusted for inflation, and two years in jail," she cautioned. "It's a good thing that there is a willful standard involved, so that FinCEN will not aggressively impose penalties on companies that are trying to comply. At this point I don't believe it will be an audit feature during this initial period where people are getting up to speed."
To read the full article in Accounting Today, click here.
