The Small Business Killer: How FinCEN Enforcement of the CTA Could Destroy the Last Bastion of the American Dream

Authors

Samantha M. Alecozay, St. Mary's University School of LawFollow

Journal Title

Lincoln Memorial University Law Review

Volume

12

Issue

1

First Page

1

Document Type

Article

Publication Information

2024

Abstract

The Corporate Transparency Act (CTA), passed into law in 2021 and made effective January 1, 2024, mandates the creation of a nationwide database that collects owner information of certain legal entities to help combat money laundering and other illicit financial activities. The CTA requires that the legal entity owners provide necessary information directly to the federal government, rather than relying on state and/or federal government officials to collect the information on their behalf. Further, failure to comply may result in the legal entity and owners incurring significant civil penalties of up to $591 per day of violation and even criminal penalties.

This article addresses an urgent matter regarding the repercussions of FinCEN enforcement of the CTA against small businesses. As of January 1, 2024, tens of millions of small businesses in the U.S. are currently subject to the statute's reporting requirements, as small businesses are the statute's main target. However, only a minority of affected small businesses are aware of the CTA's requirements, and the threat of severe financial penalties looms just over the horizon of 2025 for those unaware.

Recommended Citation

Samantha M. Alecozay, The Small Business Killer: How FinCEN Enforcement of the CTA Could Destroy the Last Bastion of the American Dream, 12 Lincoln Mem'l U. L. Rev. 1 (2024).