Sidney attorney cautions injunction could be overturned

SIDNEY -- An injunction has been issued stopping Corporate Transparency Act and Beneficial Ownership Information Reporting with FINCEN.

However, that doesn't mean those affected should sit still.

Kendra Strommen, a partner with the Law Office of Mattoon, Martens and Strommen explained the Act and what it can mean to businesses. In its simplest, the Corporate Transparency Act identifies who is involved in business.

"All people who have done business with our law firm that have set up an LLC or corporation received a letter pertaining to this Corporate Transparency Act (CTA), which goes to the beneficial ownership information report that must be filed with the U.S. Department of Treasury," Strommen said.

She said the Corporate Transparency Act enacted in 2021 requires anyone who owns 25 percent of an LLC or a corporation, or makes management decisions to provide their name and address so the government knows you're a real person and not a money laundering operation.

"It is a nationwide requirement that was enacted by the federal government in 2021. But, it did not come down to you having to be compliant with it until Jan. 1, 2024, and we have until Jan. 1, 2025 in order to get everyone who has an established LLC and an established corporation to be compliant with the federal regulation. If you are a new LLC member, or a new corporation member that has actually been set up recently then you only have 30 days in order to comply with the federal government," she said.

A new corporation member that has actually been set up recently has 90 days in 2024 and 30 days in 2025 to comply with the federal government. 

A Texas Federal Court recently issued an injunction stopping businesses from having to comply with the CTA. Strommen cautions the decision can be changed.

"This is a federal court in Texas and it could easily be overturned by a higher court. So, I do encourage anyone who is in an LLC or a corporation to go ahead and come down to the law firm and have us comply with all of these requirements because it's a high likelihood that it will be overturned for many reasons. It might be proved constitutional, and then you'll be in compliance," she said.

Strommen encourages people not to complete the process themselves.

"I would encourage people not to do this themselves, because you do have to get 'FINCEN', which is a financial crimes enforcement network number in order to file your report to the IRS, and we have that," she said.

She added the penalty for not filing the reports is two years in prison and a $10,000 fine.