Legal Thoughts – Episode 1 of the Corporate Transparency Act
COLEMAN JACKSON, ATTORNEY & COUNSELOR AT LAW | Transcript of Legal Thoughts
Published August 28, 2023
Topic: “FINANCIAL CRIMES ENFORCEMENT NETWORK (FINCen), U.S. Treasury’s Beneficial Ownership Information Reporting Requirements
Attorney Introduction:
My name is Coleman Jackson and I am an attorney at Coleman Jackson, P.C., a taxation, contracts, litigation and immigration law firm based in Dallas, Texas, United States of America. In addition to myself, we have our Legal Assistant, Leiliane Godeiro, Law Clerks, Ayesha Jain and Mlaah Singh, and Admin Assistants, Ernesto Munoz and Michelle Gutierrez.
On today’s “Legal Thoughts” podcast, our Law Clerk, Mlaah Singh, will be interviewing me on the important topic of: “Beneficial Ownership Reports” This is a series of podcasts, and today’s episode, which is our first podcast in this series will focus on: “An Overview of the Corporate Transparency Act (CTA)”
Interviewee: Hi everyone, my name is Mlaah Singh and I am a Law Clerk at the tax, contracts, litigation and immigration law firm of Coleman Jackson, Professional Corporation. Our law firm is located at 6060 North Central Expressway, Suite 620, right here in Dallas, Texas, United States of America.
Interviewer Introduction:
Good afternoon Attorney; thank you for agreeing to sit with me as I interview you with respect to this hot business law topic: “FinCEN Beneficial Ownership Information Reports” Let’s get started with our first podcast in this Series: A Brief Overview of the Corporate Transparency Act! Attorney, this topic seems to be timely and very-very important for our Legal Thoughts podcast audience. I look forward to interviewing you on the Corporate Transparency Act.
Question Number One:
It seems like this law will impact practically every small and medium size business in America. Is that right? Could you explain what public policy goals are behind the enactment of the Corporate Transparency Act?
Interviewee: Coleman Jackson, Lawyer
ATTORNEY ANSWER – QUESTION 1
Mlaah, you are absolutely right with respect to the potential scope and impact of the Corporate Transparency Act. No one should be fooled by the word ‘corporate’ in the title of the law. This law is going to impact small and medium size businesses structured and doing business in the United States under State business structuring laws whether they are a corporation or not. Your question is a very astute question. So let me begin with why Congress enacted the Corporate Transparency Act. In 2020, the Anti Money Laundering Act was enacted by Congress with the intent to detect, expose and prevent money laundering and other nefarious financial crimes. The Act hoped to increase financial information sharing between companies and their respective partners, subsidiaries, and with their international locations or operations. Under this statute, the Financial Crimes Enforcement Network (FinCEN) was charged with the authority and responsibility to complete a three-year study to ensure that the impacts of this Act on American businesses was a positive one. Congress’ goal in enacting the statute was to combat money-laundering, detect financial corruption, and other nefarious business activities in American business. The Corporate Transparency Act, or CTA is Section 6403 of the Anti-Money Laundering Act of 2020. The CTA was enacted in 2021 and its effective date is January 1, 2024. It is estimated that the national implications of enactment of the Corporate Transparency Act on American businesses will be huge. More than 32 million small and medium sized companies throughout every State in the United States are expected to be impacted.
That is in a nutshell why our law firm is recording this new Corporate Transparency Act Legal Thoughts podcast series. We think that it is very important that our podcast audience know what the CTA does, who it impacts, what is required of them, and the potential civil and criminal consequences if small and medium size businesses do not timely comply with the Corporate Transparency Act.
Companies in America impacted by the CTA will have to file Beneficial Ownership Information Reports with the Financial Crimes Enforcement Network that will be accessible within one secure national database that holds vital information in order to improve the U.S. Department of the Treasury’s ability to detect, oversee and prevent financial crimes. The Internal Revenue Service (IRS) is likely to improve its ability to ferric out tax fraud, tax evasion other tax crimes exposed when the real owners (beneficial owners) of U.S. businesses are required to give their lawful names, addresses and contact information in Beneficial Ownership Information Reports filed with FinCEN beginning January 1, 2024. I will explain the Beneficial Owner Reporting requirements in more detail in a future Legal Thoughts podcast in this CTA series. Our audience, if interested in knowing more about the CTA, should subscribe to our Legal Thoughts podcast.
According to the Congressional record and the Federal Register Final Rule 31 CFR Part 1010 published by the Financial Crimes Enforcement Network; some reasons for enacting the CTA are to “help prevent and combat money laundering, terrorist financing, corruption, tax fraud and other illicit activity”. Integrity in American businesses is vital to the vibrancy and health of the economy of the United States and, frankly, the health of the global economy. I think the public policy behind the U.S. Congress in enacting the CTA is grounded on this fundamental principle objective. Corruption is a contaminant that destroys fair competition and thereby damages everyone’s potential.
As I mentioned early in the podcast, the Financial Crimes Enforcement Network (FinCEN); which is an agency of the United States Department of Treasury, is the federal agency empowered with the authority and responsibility to enforce the Corporate Transparency Act. This organization is commonly referred to as simply “FinCEN”. FinCEN is the same agency where banks have reported certain suspicious banking transaction activities for years. FinCEN is the same agency where we have assisted clients to file FBARs reporting their foreign bank accounts and other foreign assets and holdings. FBARs currently are filed each year with FinCEN on or before April 15th.FinCEN is charged with the authority and power to doggedly work to collect and analyze vital information regarding domestic and foreign financial affairs. To combat money laundering, terrorist financing, fraud, and a plethora of other financial crimes. FinCEN’s mission is to protect the integrity of American businesses and their relationship with their government. Dishonesty, corruption and fraud unchecked erodes trust and thereby destroys relationships.
INTERVIEWER: Mlaah Singh, Tax Law Clerk
Interviewer Comment:
Thank you Attorney. I think our audience can understand now why the CTA was enacted. Everyone of us should be given the opportunity to excel, contribute and serve our country and contribute to the global good. Unbridled and unchecked dishonesty, fraud and corruption prevents us individually and collectively as a country from achieving our true potential. Attorney I think it’s good that you intend to shine more light on this topic by doing more podcasts on the impact of the Corporate Transparency Act on small and midsize businesses throughout our country.
Question Number Two:
Interviewer: My second question for you today, Attorney, is my final question of the day on this topic; and, it is this one: What other areas are you planning to discuss in our future podcast regarding the Corporate Transparency Act?
Interviewee: Coleman Jackson, Lawyer
ATTORNEY ANSWER – QUESTION 2
Mlaah, your comment is a good summary of what I said about the public policy behind the United States Congress enacting the Corporate Transparency Act of 2021. As for your second question; in future podcast on the CTA, I intend to explain the following:
1. What the Corporate Transparency Act requires;
2. Who must comply with the Corporate Transparency Act;
3. What must small and medium sized businesses do to comply to FinCEN;
4. Where, when, and how individuals may file their Beneficial Ownership Information Report
5. What are civil and criminal penalties can be applied for failure to comply with the Corporate Transparency Act
INTERVIEWER WRAP-UP : Mlaah Singh, Tax Law Clerk
Attorney, thank you for sitting with me today in our first podcast on the Corporate Transparency Act and FinCEN’s Beneficial Owner Reporting Requirements. Today’s podcast was just an overview of the public policy behind Congress’ enacting the Corporate Transparency Act. We have about three to four more podcasts scheduled in this series where our law firm intends to shed more light on the impacts of the CTA.
Our listeners who want to hear more podcasts like this one please subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever you listen to your podcast. Everybody take care! And come back in about two weeks, for more taxation, business structuring, contracts litigation and immigration Legal Thoughts from Coleman Jackson, P.C., located right here in Dallas, Texas at 6060 North Central Expressway, Suite 620, Dallas, Texas 75206.
English callers: 214-599-0431 | Spanish callers: 214-599-0432 |Portuguese callers: 214-272-3100
ATTORNEY’S CLOSING REMARKS:
Thank you all for giving us your ear today on the Corporate Transparency Act (CTA) Overview”.
We intend to talk more about the FinCEN implementation of the CTA in several more podcasts in the next few weeks or so. Our listeners should stay tuned for future podcasts in this series; definitely, our listeners who run their own businesses!
If you want to see or hear more taxation, business structuring and contracts litigation and immigration LEGAL THOUGHTS from Coleman Jackson, P.C. Subscribe to our Legal Thoughts Podcast on Apple Podcast, Google Podcast, Spotify or wherever you listen to your podcast.
Stay tuned! We are here in Dallas, Texas and want to inform, educate and encourage our communities on topics dealing with taxation, litigation and immigration.
Until next time, take care.
