If you aren’t familiar with the CTA, now is a good time to become familiar.
Why? Non-compliance can subject people to civil penalties of up to $500 per day and criminal penalties of up to $10,000 or imprisonment for up to two years.
Who does the CTA affect? Corporations, LLCs, LPs, and LLPs.
Turnkey solution to help clients
It’s one thing to bring this issue up with business clients. It’s quite another to be able to bring them a solution to help them comply with the requirements.
Who is going to help your clients comply? Their CPA? Their Attorney? Maybe…
If you want to use one of my trusted team members to help your clients, you can. Why use a trusted team member? Because you know it will get done right and in a timely manner.
Phillip J. Reed, Attorney at Law
I’ve talked with Phil and he’s willing to do work on a nationwide basis to help clients comply. He’s agreed to a fee schedule: $250 for the 1st entity and $125 for each one thereafter!
Download Phil’s client letter—Phil created a client letter you can send to clients to make them aware of this issue and offer help. To download the letter, click on the following:
https://advisorshare.com/cta-letter
What is the CTA?
It’s a new law that requires business owners to report their Beneficial Ownership Information (“BOI”) unless exempted under one of the 23 specified exemption categories.
Who are businesses reporting to? The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.
What needs to be reported?
-legal name, trade name, and “doing business as” name
-current U.S. address of the principal place of business
-state of jurisdiction where the entity was formed
-tax identification number
The person filing the form (the “Company Applicant”) also must be included along with that person’s DOB, current business or residential address, and a copy of a driver’s license or passport.
Beneficial Owners Definition: BOIs are individuals who either exercise substantial control over the company or own/control at least 25% of the company’s ownership interests (this includes “senior officers” such as Presidents, CEOs, CFOs, general counsels, and COOs.
Filing Deadline! Entities formed before January 1, 2024, must file before January 1, 2025.
Why was the CTA law enacted?
The government wants ownership transparency of entities to prevent anonymous shell corporations from engaging in illicit activities such as money laundering, drug trafficking, terrorist financing, and tax fraud. It’s supposed to aid law enforcement, national security, and intelligence activities by exposing bad actors hiding their identities behind anonymous corporate structures.
23 Exemptions (here are the three I think are useful)
-SEC-registered RIAs
-Entities with 20 full-time employees that have gross sales of $5 million or more
-Tax-exempt entities
If you download Phil’s client letter, the list of all 23 is in there.
What’s the bottom line?
This new reporting requirement is awful. It will cause unneeded expenses and waste time of businesses. There is potential for the government to abuse the information and a high probability that it will be hacked or leaked to those who shouldn’t have it.
From an advisor’s point of view, this is an opportunity to show value to clients by letting them know you are aware of this issue and have a low-cost/high-quality solution to deal with it.
My New Book: 5-Pillar Asset Protection
If you missed last week’s newsletter, you didn’t get to learn about my new book!
How do you order a copy of the book?
1) You can buy it on Amazon at “retail” right now (click here).
2) To buy up to 3 copies at my COST*, click on the following link:
https://www.uploadedimages.net/content/PDFs/Book.Order.Form.5-Pillar.AP.pdf
If you order copies at cost it will take a few weeks to receive them.
What’s the book about? It’s a CONSUMER book where I cover what I believe are the FIVE most important items that need to be dealt with when putting together an “asset protection plan.”
-Lawsuit protection
-Tax reduction (protection from the IRS)
-Stock market risk mitigation
-Protecting against long-term care costs
-Making sure your estate plan is fully in order
I cover everything an advisor wants to be covered including FIAs, FIAs with income riders, IUL, tax-reduction strategies, AB-LTC, stock market risk mitigation (sequence of returns risk, risk-managed strategies, structured notes), and much, much more.
