Beneficial Owner Reporting Considerations

In early July, Treasury Secretary Janet Yellen indicated that the Treasury Department is not planning on extending the filing due date for registrations required under the Corporate Transparency Act.

The Corporate Transparency Act requires many business entities to report information about their beneficial owners in a brand-new government database. Search our tax news archive for “beneficial owner” to see our numerous earlier posts on this topic.

Registration reports for entities that existed prior to January 1, 2024, are due by January 1, 2025. For entities that were created on or after January 1, 2024, the due date is much sooner, as discussed in our post on December 5, 2023.

Clients or practitioners who are hoping that this requirement changes or is extended may be tempted to wait and not take action. However, waiting creates the risk that a client will not have time to comply with the registration requirement or creates a very tight timeline for clients and/or practitioners to scramble and meet the requirement just before the due date. As a result, it appears prudent to do the required registration now or soon.

Practitioners who have decided not to offer services related to this registration requirement must still make sure that their affected clients are aware of this new requirement and have time to meet it using other means or providers. Substantial penalties (both civil and criminal) can apply to those who do not comply with the requirements of this law.

The Tax Year 2023 M+O=CPE Individual Tax Year-End Workshop Reference Book has a detailed discussion of the registration requirement on pages 60 to 67.

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