ASA Calls for the Delayed Implementation of the Corporate Transparency Act (CTA)

ASA, along with the Small Business Legislative Counsel (SBLC), sent a letter to the Senate Banking Committee Chairs urging to delay the filing deadlines of the Corporate Transparency Act (CTA) by passing S. 3625, the Protect Small Business and Prevent Illicit Financial Activity Act introduced by Sen Scott (R-SC). The companion to this legislation (H.R. 5119) was adopted by the House of Representatives on a bipartisan vote of 420-1 on December 12, 2023.

A one-year delay of the CTA’s filing deadline would allow the court process begun with the recent decision in National Small Business Association v. Yellen to work its way through the Appellate and Supreme Courts, be consistent with congressional intent to give covered entities two years to comply with the CTA’s reporting requirements, and provide the business community and the Financial Crimes Enforcement Network (FinCEN) additional time to educate millions of small business owners regarding the new reporting requirements and the onerous penalties resulting if they fail to comply.

The CTA began as an earnest attempt to combat illicit financial activity, but has morphed into a bureaucratic nightmare targeted squarely at America’s smallest businesses. It subjects covered entities and their “beneficial owners” to vague and complex reporting requirements while putting their sensitive personal information at risk. Failure to comply with the new statute, even in cases amounting to nothing more than a paperwork violation, can result in stiff fines and criminal penalties.