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Corporate Transparency Act: Two Years in PRISON for Small Business Owners failing to File a New Form
Hopefully this post will keep someone out of legal hot water, and maybe prison eg Jane’s Restaurant or Bob’s Hot Dogs or Ramon’s Tacqueria—you know... the serious criminal types.
This seemed so outlandish that I could hardly believe it: two years in prison for failing to file a new federal form. Yep.
Consider that if they 'want' you and you forget to file, the Feds will use this in addition to other bludgeons to beat anyone they want into submission. Free speech anyone?
Starting in 2024, the Corporate Transparency Act (CTA) requires most entities to file a beneficial ownership form with the Financial Crimes Enforcement Network.
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov).
Companies required to report are called reporting companies. There are two types of reporting companies:
- Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States...
As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.
WIND: “Bob’s hot dog stand” if formed as an LLC or S-Corporation or similar could see Bob going to PRISON for two years not filing this form. Every year.
Not going to happen you say? 2023 marked the emergence of lawfare in a major way for disfavored people. In practice, “willfully” means little more than “play nice” or we’ll play hardball”. Nice touch, Congress!
Meanwhile, the entire list of exemptions is (naturally) powerful industry firms, the ones most likely to encompass financial frauds.
As far as I can tell, this applies to one-person entities including S-Corporations and LLC’s eg numerous self-employed people eg DIGLLOYD INC (me) with me as the only shareholder, etc.
No exemptions for revenue.
And... were I to die, then my wife and children, inheriting the corporation, could all be prosecuted by being unaware of this requirement.
Mind you, an S-Corp already has to file state and federal tax returns in addition to annual state corporate returns every year for this one-person company. Plus, an S-Corp flows through to personal taxes both state and federal, so it’s all there too.
The whole thing is chilling. I no longer recognize my country. Design is destiny; this is one more thread in the spider’s web for ensaring everyday people who become 'undesirable', should the desire arise.
