Corporate Transparency Act can be enforced, court rules. Here's what it means for business owners.
Source: CBS News
Updated on: December 23, 2024 / 6:34 PM EST
An anti-money laundering law called the Corporate Transparency Act, or CTA, appears to have been given new life after an appeals court on Monday determined its rules can be enforced as the case proceeds. The law requires small business owners to register with the Financial Crimes Enforcement Network, or FinCEN, by Jan. 1, or potentially pay fines of up to $10,000.
The registration rule had been on hold since Dec. 3, when a federal court in Texas issued a preliminary injunction prohibiting its enforcement. But on Monday, the 5th U.S. Circuit Court of Appeals lifted the order, ruling that the decision is in the "public's urgent interest in combating financial crime and protecting our country's national security."
The CTA requires that the owners and part-owners of an estimated 32.6 million small businesses must register personal information with FinCEN, such as a photo ID and home address. With the court ruling that enforcement can proceed, many small business owners may scramble to register ahead of the Jan. 1, 2025 deadline, although businesses that started in 2024 were given 90 days to register.
Some civil liberties groups decried the ruling, saying that the regulation represents governmental overreach. "The government cannot be allowed to maintain this unconstitutional statute, which stretches beyond Congress's proper authority to regulate Americans," said the New Civil Liberties Alliance, a civil rights group, said in a statement emailed to CBS MoneyWatch. The Treasury Department did not immediately reply to a request for comment from CBS MoneyWatch.
Read more: https://www.cbsnews.com/news/corporate-transparency-act-cta-fincen-ruling-injunction-what-it-means/
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