Corporate Transparency Act: What You Need to Know

Sovereign Confidential

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The Corporate Transparency Act is an unfortunate piece of US legislation that was enacted in 2021 and came into effect as of January 1, 2024.

Starting this month, the US federal government wants to know the creators and owners of every single domestic legal entity (trust, corporation, LLC) on US soil, including sensitive details such as people's names, residential addresses, and ID numbers. 

This information will be collected and stored by the Financial Crimes Enforcement Network (FinCEN), an agency within the US Treasury Department… which is really just bizarre. It’s as if the government is trying to signal that owning a domestic US company is some sort of financial crime.

And the reporting is not just a one-time thing. If any information changes– for example, you obtain a new driver's license or change your residence, you must inform FinCEN within 30 days.

Failure to do so will result in a $500 fine for each day of noncompliance per company. The most severe violators could face up to two years in prison.

It's difficult to imagine a law that intrudes more on one’s privacy.

We hope this legislation will be repealed under a different government. But until that happens, this report covers what you need to know about the reporting requirements.

We even show you screen shots of the reporting website to give you a step-by-step guide. 

As always, make sure to consult with a tax professional familiar with your individual situation, or email us if you need a referral. (We consulted with one such professional when crafting this report.)

In 2021, we published a report about a privacy-intrusive piece of legislation passed by the US government – the Corporate Transparency Act (CTA), that was supposed to become active in 2024. Back then, we hoped it would get overturned. Unfortunately, it wasn’t… and it went into full effect on January 1, 2024. The goal of…

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