What are the Penalties for Not Filing the CTA (Corporate Transparency Act)?

FinCEN’s Penalties for the Corporate Transparency Act

Being served a hefty fine for improper paperwork is the last thing you would want as a business owner. However, the newly proposed rules could bring this exact situation for many who are not keeping up with FinCEN. Not being aware of these latest changes can place you as well as other people in the organization in trouble with officials. It is not just an easy process where you can place down any information that you assume to be correct for the filing. The penalties are being imposed for those who either don’t file or end up filing something that is incorrect.

If/when officials choose to come after individuals with discrepancies on their filings, we could start to see a significant increase in fines being collected by FinCEN.

What Happens If you Don’t File The CTA on Time?

As stated at 31 U.S.C. 5336(h)(1), you would become liable for $500 for each day that the proper filing was not completed.

That would be each day after the proposed due date. At this time, that date has not been posted yet.

What Happens If you Don’t File The CTA Correctly?

Also stated at 31 U.S.C. 5336(h)(1), willfully providing, or attempting to provide false or fraudulent information could result in a criminal violation including up to a $10,000 fine and imprisonment for up to two years.

What If I don’t know the correct information to file?

Beneficial Owners are responsible for knowing or obtaining this information to ensure the filing is done on time.

There are a lot of possible situations where there may not be the ability to acquire the correct information needed. This leads us to many questions about how FinCEN will choose to enforce criminal penalties for those who may not even be aware that they submitted incorrect information. Many of which have yet to be addressed, which is why it is very important to stay up to date with all of these changes.

What If a Beneficial Owner Passed Away?

As proposed at 31 CFR 1010.380(a)(2)(ii), after the estate of said deceased is settled, the reporting company is then responsible for filing an updated report to inform of the change.

This would mean that there is a gap of time in between the Beneficial Owner’s passing and the point at which you must submit the update.


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