How the Corporate Transparency Act Will Impact Missoula Businesses

Missoula, MT (KGVO-AM News) - According to a press release from the ‘Journal of Accountancy’, the federal government has been ordered to stop enforcement of the CTA (Corporate Transparency Act) forcing millions of businesses to provide BOI (Beneficial Ownership Information) to the U.S. government.

I spoke with Missoula CPA Walt Kero with Kero Byington and Associates about this week’s court order.

Kero Has Provided Helpful Information to KGVO Listeners About the CTA

“In 2021, Congress, at the behest of some agency of the federal government, felt that they needed to develop information, and they ended up with a thing called the Corporate Transparency Act,” began Kero. “They want to know who owns what businesses, including small businesses because they were concerned about foreign ownership of small businesses.”

Kero expanded on the purpose of the act.

“By December 31^st  of this year, they wanted existing businesses, at the beginning of the year to file this report, this ‘BOI’ (Beneficial Ownership Report), which indicated who were the beneficial owners, not the paper owners, but who actually had money invested in these companies,” he said.

The fines for noncompliance with the Corporate Transparency Act were onerous.

The Penalty for Non-Compliance was $500 Per Day up to $10,000

“The penalty was $500 a day for the first 200 days, or something like a $10,000 bill,” he said. “That means every LLC, partnership, S corporation, or small business corporation, registered with the Secretary of State was required to fill out and file these forms.”

Kero said the court action in Texas has forced the CTA to a grinding halt, albeit temporarily.

Kero Cited the Texas Case that Caused the Federal Court Injunction

“There was a court case in Texas called the Texas Top Cop Shop v Garland, and the judge said, ‘Hey, I think this corporate Transparency Act and parts of it at least are unconstitutional. So he put in place an injunction. That means for the time being, everybody can stand down, take a long, deep breath and not worry about having to file this form by December 31 of this year.”

The press release stated in part "The CTA is a law enforcement tool — not an instrument calibrated to protect commerce; an exercise of police power, rather than a regulation of an activity which might impair commerce among the several states. This the Commerce Clause will not tolerate."

Click here to read the press release issued by The Journal of Accountancy.