Elder law attorney Steve Waltar joins Suzanne to talk about the Corporate Transparency Act, a new federal law made to thwart money laundering, but has overreaching implications for owners of new and existing small businesses and their legal agents across America.

Steve explains, "This law is for anyone that created a business in 2024, and there are some exclusions. Nonprofits, the really large corporations are out of it, but it's LLC, it's corporations, things like that. And basically you have to report the entity. So if you're the agent — like a law firm, we help people incorporate — within the first 90 days, you have to report your Social Security number, your driver's license, a bunch of stuff. And then for everyone in the business, you have to say who owns more than 25%. So it's really hard now for anyone that is creating an entity to hide behind their lawyer. It affects most small businesses. You've got to report the full legal name, the trade names, the addresses, the taxpayer identification number.

"Civil penalties are up to 500 a day, criminal penalties are two years of imprisonment and $110,000. But if it's knowing, then civil penalties are 500 day and criminal penalties are five years in prison and a $250,000 fine. Unauthorized use or disclosure, under federal law, is ten years of imprisonment and a half-million dollar fine.

"I wanted to make sure that any entity that we are the registered agent of, I said I want out. I don't care. It's not worth it. Because, you know, if you're late and you're filing these things, [fines are] just going to start to accrue."

The law has been challenged already. On December 3, a federal judge in Texas filed a preliminary injunction. "So all of the reporting requirements are halted. If you formed an entity, talk with the attorney or the accountant that did that talk with your registered agent. But for the short term, we're off the hook. There's no reporting required right now."

Visit the Legacy Estate Planning website at waltar.com for beneficial articles, resources, and webinars.

* Steve Waltar: https://www.waltar.com/our-firm/about-our-firm/

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