The CTA is here! Does it affect your small business and what should you do?

#69. The Corporate Transparency Act is actively affecting businesses in 2024, so does it affect yours? If so, what do you do about it? Sevana and Tiffany break it all down in today's episode!

**Sorry for the poor sound quality toward the end of this episode**

RESOURCES:

FinCEN’s Beneficial Ownership Information Reporting homepage, offering guidance and educational materials

FinCEN’s Reference Material, featuring rules and regulations related to the CTA

FinCEN’s Small Entity Compliance Guide, intended to assist the small business community in complying with the beneficial ownership information reporting rule

FinCEN Identifier Application

FinCEN Beneficial Owner Reports

https://www.score.org/resource/article/understanding-and-complying-federal-corporate-transparency-act

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Transcript

SPEAKER_00 0:04

The whole time. By the end of the show, our face will just be next to each other. Welcome.

SPEAKER_01 0:12

Hi everyone. Thank you for listening to our podcast. Tiffany and I give our all to this podcast by curating information, researching platforms, and creating a show with the best up-to-date information we can. We have a vested interest in the growth and health of your business and hope you feel the same way about us. Would you like to produce a show? Of course you would. All you have to do is email us at the businessbehind small business at gmail.com to express your interest and we will share with you all of the marketing opportunities you will get in exchange. Please support us so that we can continue supporting you. And with that, we welcome you to our show, The Business Behind Small Business. Whether you're selling or staying, we're here to remind you that just because you own a business doesn't mean you are a business owner. It might not make sense now, but it will. We are your hosts, Savannah Stone, and Tiffany Cao, sharing the more finite details of entrepreneurship, revealing the dots between startup and success. No one gets to a million without getting a little dirty. And there's a lot of business behind small business, so let's get to it. Since 2020, it's been a roller coaster of bills and laws and acts and restrictions and regulations for new and established businesses. It's kind of difficult to keep up with all of them. Like, really, it's been hard. I feel like at one point, especially in 2020 and 21, it was like an everyday occurrence. We're gonna do this, now we're not gonna do this, we're gonna do this, now we're not doing that, we're gonna do this instead. I mean, it was just back unfortunately. I think it kicked up since 2017, I'm for sure. For sure. So this year, the most important act to go into effect is the CTA, which stands for Corporate Transparency Act.

SPEAKER_00 1:54

Yeah, if you haven't heard about it by now, you'll hear about it all this year.

SPEAKER_01 1:57

Oh, for sure. Um, so what does this mean for your small business? Well, we're going to talk about it and dispel as best as we can what it all means. But before we begin, please note our disclaimer. This is available in both our show notes and on our website and should be referred to before and or after this podcast.

SPEAKER_00 2:16

Okay, so the CTA is actually a law that went into effect. Funny enough that the fact that it affects so many people that it didn't really become a thing. I think I didn't hear about it until maybe like December of last year, November of last year. And really only like the hardcore, I feel like accounting podcast, because apparently that's what I listened to, right? Uh talked about it. So here we go. But it's it's real now. So the whole idea of the CTA is to fight against money laundering, financial frauds, you know, other things that has to do with money, basically. And it's called the Corporate Transparency Act because it's trying to instill more transparency of corporate entities. Um, especially those like you probably heard about this in like, you know, shows like Sucession and stuff like that, where you have all these shell companies to basically hide like, you know, business you don't want other people to see that you're doing and moving around money and transferring and all that stuff. This is what this act is supposed to stop.

SPEAKER_01 3:10

I think it was also mentioned in the first episode of Ozarks.

SPEAKER_00 3:13

Oh, yeah, yeah, yeah. Shell companies, you hear about it all the time. Oh, we tried to trace so-and-so money back to the shell company and now it's a dead edge. So essentially, this this law is trying to put a stop to that. Because as you would imagine, in this day and age, there's a lot of financial crime and it's increasing complexity because it's not just domestic anymore, it's all global and we're all interconnected, so it just makes it that much harder. So uh the whole idea about the act is that um companies, certain companies, which we'll go through what kind of company it is, and just to be clear, the reason why we're talking about this is because it that company is probably you.

SPEAKER_01 3:49

Yeah, it affects most small businesses, yes, exactly.

SPEAKER_00 3:54

So the whole idea about the act is that as um if you are quote deemed a beneficial owner of the business, which again we will break down and define a little bit later on, you have to report a lot of your information to the Financial Crimes Enforcement Network, also known as FinCEN, which is a uh a depart uh a part of the US Department of Treasury. Um which I'm gonna go with a little deeper into a little bit. Yes, exactly. Now, Vincent's been around for some time, which you'll kind of actually dive into, but it's been around since like the 1990s. So this is not a new thing, but like I said, I think it's kicked up because of everything that the world is like today. Yes. And like I said, the reason we're talking about this is that this act actually doesn't apply to big companies with big operations, it's actually pointed at smaller, privately held entities, uh including LLCs, which is commonly used for small business. So publicly traded companies, financial uh service providers, um banks, and stuff like that are actually exempt. Now nonprofits are also exempt.

SPEAKER_01 4:58

And you would and would you agree with me that the reason why that is is because publicly traded companies assuming the fact they're already heavily regulated. They're already heavily well, yes, assuming the fact that they're already heavily, which they probably are heavily regulated, uh, they are already reporting information very similar to this. And publicly. In publicly, yeah. So, and like those larger nonprofits as well, or any nonprofit, it already has to present all of this kind of information publicly. So that's the reason why it's not like you're trying to get the the small business or the middle, you know, the middle class. That's not the point. The point is oftentimes illegal uh activity happens on a small business level, more so than you can really can't get away with as much if you are a larger corporation. Because there's more scrutiny. There's more scrutiny, there's also a lot more players involved. Yeah, you have to be audited. Yeah, you have to be audited. There's oftentimes a board involved, there's oftentimes, you know, there's just a lot more regulations and restrictions, but there aren't as many, if any, regulations or restrictions on smaller companies, which is why oftentimes it can fly underneath the radar.

SPEAKER_00 6:03

Exactly. There's a lot more loopholes. This is supposed to close those loopholes. Yes. Now, that being said, of course, a few bad actors, I feel like, are ruined for the rest of us because there's plenty of very honest business owners. Now, the the cross of this is that subproprietors are not are also exempt from this act, which I mean, to be quite honest, for legal protections and tax purposes, it's better that you have some kind of entity or incorporate it. Yeah. So, you know, it's just like a it's a funny catch 22 at this point.

SPEAKER_01 6:31

Well, and if you're a sole proprietor and you're trying to do a legal illicit activity, you're gonna get caught by the IRS on your personal side.

SPEAKER_00 6:36

So yeah, so that's the reason why it doesn't quite apply to sole proprietors, but mostly to like LLCs, um, S-corp, C Corps. Fun, right? So um, this is a little bit about the timeline because I always like to know where these things come about. So even before 2019, there was already talk about trying to enhance corporate transparency. So this is not a first time this kind of came out of nowhere kind of topic. It's been talked about for years about the fact that financial crimes, obviously fraud and stuff like that. This is not anything new. Shell companies, you know, doing illicit like activities, not anything new. It's happened for a very long time. Oh my gosh, it goes all the way back to the mop era of the early 1900s. Right. Yes.

SPEAKER_01 7:18

Maybe further than that, I wouldn't know, but yes, it's been going on for a very long time.

SPEAKER_00 7:24

And then in 2019, there was a uh there was a transparency proposal that basically set the stage for the Corporate Transparency Act. But it wasn't until 2020 that Congress actually passed the Corporate Transparency Act as part of a uh National Defense Authorization Act for 2021. Um, and this was a huge step up in uh essentially helping this agency that has been um whose sole purpose is to basically fight financial crimes, but you know, have been doing it maybe with one arm you know tied behind their back, right? So then in January 1st of 2021, Congress actually overrode uh President Trump's veto, and this was when they officially enacted the Corporate Transparency Act into law. Now, November 30th of 2023, which was just last year, an amend amendment actually extended certain filing deadlines under the Corporate Transparency Act. So I think like we always do with laws that come in place, we put the law in place and then realize people need more time to actually get with it. Yeah. Maybe that's because nobody has heard about it. Right. So it's not like we're all getting notifications. There was no notification about this. I think. I mean, that's why I'm also kind of shocked how far back this goes because I don't recall hearing too much about this at all, right? So then, um, so end of last year is when the filing deadlines extended, and this these deadlines are important, and this is what we're also gonna talk about, so you'll know these deadlines by the time we're done. But kind of at a high level, January 1st, 2024, which just passed, by the way, the uh Corporate Transparency Act is in full effect. All the new reporting requirements are like are are put out there, and businesses have to comply. And January 1st, 2025, which is basically a year from now, the deadline for existing businesses that formed before January 1st, 2024, are due to actually file their Corporate Transparency Act reporting requirements. So it's like if you already have a business before the start of this year in 2024, you have basically a year to kind of get it together, right? And get that filed, right? And then not only that, going forward, I mean, I feel like this is gonna be a part of normal, normal like new company formation now, is you basically have to file this. And then if things change, which again we'll go through the details of what changes in your company as you've grown, you also need to maintain this reporting. So it's not that it's a once and done. It seems like if you're gonna have an ongoing business, it's something that you always have to keep in mind, and again, just becomes a regular part of doing business in America. Yeah. Okay. Now, here's the thing. Of course, the information you provide, which again has some personal, quite a bit of personal information for the beneficial owner, is supposedly not publicly accessible. But you do need to know that law enforcement agencies can request to see this information should certain circumstances come up, or they have to do some kind of due diligence from some kind of financial institute that you maybe bake it up. Um, non-compliance. So if you decide you decide that you don't want to do this, uh it can result in fines for up to $10,000. I think it's like what, $500 a day? Yep, right? I think it was $500 a day, and you can actually go to prison for this. So they are not fooling around this time. Now, uh the great thing is, thank goodness you can file all this online. So this is not a paper-based, let's mail it in. Everything is online. I checked out the website for Vincent to file all this information. It's actually pretty well put together. It's it has a lot of information on there. They're there to help you out. They even have a hotline for you to call with any information. So they're um they're kind of ready and waiting. But of course, guess what people are gonna do is they're gonna wait till December 2024 to do any of this. So I bet those hotlines will be a little backed up as we get closer to the end of the year. So maybe you want to get on it if you don't want to be standing in, you know, on the phone with the uh with the government agency. Now, as you imagine, this act is a little controversial, of course. Anytime when you talk about having personal information with the US government, there are people who like it and people who do not. So, of course, you know, the great thing about the act is yes, there is a lot of financial crimes these days. There's a lot white-collar, there's a lot of financial, just uh devious acts that happen these days, especially over the internet and everything like that. So I a lot of people, of course, will support this. It's like great crackdown on the illegal activities. Now, of course, those who don't support it are saying that, you know, again, personal data in the hands of the government, not a great thing. Also, cost to the small business owners in time of risk, let's say if you choose to do it yourself, or the hard cost if you choose to have somebody help you with it, because somebody's got to pay for that time to get help. Um, so you know, think about it if you're like a home-based business or you're one person online e-commerce business, but you're incorporated in any way, whether it's an LLC or some kind of corporation, um, you have to file this on time and you have to file it correctly.

SPEAKER_01 12:17

So, which again, I kind of feel like it should just get chalked up as part of the cost of doing business.

SPEAKER_00 12:24

Yes, I I agree with that. I think this is just it's gonna be a regular thing in about a year or two time where if you incorporate, this is part of forming your company with the state, the federal, and you have one extra agency now that you have to report to. Now, the interesting thing is I didn't know this, but I mean, internationally there's a lot of like anti-money laundering standards, and it seems like this actually brings US up to the international. So maybe we were a little bit behind all this time, and you know, just to our own detriment, maybe.

SPEAKER_01 12:53

Yeah, and for the um information that they require, it also I feel makes it easier for the FBI or for FinCEN to be able to locate who's doing the illegal activity.

SPEAKER_00 13:02

Yeah.

SPEAKER_01 13:03

Excuse me, and how, because they didn't have this information before and they'd have to seek it out, and it would take forever to catch someone in the act of doing something.

SPEAKER_00 13:13

Yeah, because these shell corporations could be pretty opaque. Oh, yeah, it could be a big dead end. Um, and that's kind of what they're set up to do, right? To avoid the stuff. So this act basically cuts through all that. Um, but regardless of whether or not it's good or bad or whatnot, it's here. We gotta do something about it. Exactly. So let's talk about how we go about this.

SPEAKER_01 13:38

So we took a lot of time to really dive into the CTA and what it means to all businesses, how to unpack the process so that we can talk through it and hopefully make it make all sense, uh make it all make sense. So we've established that this is a pretty good job, uh pretty good law, I think. So good job, Congress.

SPEAKER_00 13:58

Well, you can decide for yourself. I mean, yes, regardless, like I said, it's here, so whether you like it or not, we're all stuck with it.

SPEAKER_01 14:06

It it is what it is, but you know what? It and as as Tiffany said, it's it's gonna help prevent shell corporations, illegal businesses, money money laundering. Um, basically make it super hard for criminals to hide money. I don't see I don't see the downside to that. Um, in this transparency act, you must identify who the beneficial owner is of you of your company. Is it you or is it someone else?

SPEAKER_00 14:31

And beneficial owner is the fine. The fine term, it's not yeah, who's who gets the cheese in the company. Exactly. So so let's talk about what that means.

SPEAKER_01 14:39

According to the CTA, a beneficial owner, and you might see also BOI, it's the beneficial owner. So uh either directly or indirectly has a large stake or ownership in a company. So if you're the only person, then it's you. You're the beneficial owner of the company. If it's you and a partner, who has a larger stake? If it's 50-50, then I guess it's the both of you. Um uh the person is uh this person will be influential on the company's operations. So if it is 50-50, but one person has more onus on the company's operations, on the decisions, and will own at least 25% of the company or the company shares or something similar when it comes to controlling the company's equity. So if you are if you do have a 50-50 percent uh 50-50 ownership with someone, that's where you have to start delineating it. Figure out like who does what and why and how important it is to the company as a whole. So the the reportings are largely going to depend on when the business was established. So if the business was registered or established after January 1st of this year, then you or the beneficial owner will have to provide names, addresses, birthdays, uh ID numbers such as a license or a passport number, and the jurisdiction of this number. So if you did a license number, then what country what state is it from? If you did a passport, then what country is it from? Uh if the business was established or registered before January 1st of this year, then you don't have to provide that information. All companies, however, have to provide their legal company league company's legal name. If your company's trademarked, then the trademark, the current U.S. address, which could either be the address of the main business site, or for foreign-based companies, then they're where they're operating in the US. Uh, you'll also need to provide your taxpayer identification number and specify the jurisdiction where your company was formed or registered. Because every business has a business license, it has a business license, right? Like you form your business somewhere. So what what county is it in, what state is it in, what city is it in? Uh, and then we're also going to be uh linking the source to this information uh in the show notes. Uh so but although an annual reporting requirement has not been set yet, uh know that that's coming. There are some follow-up requirements that have not been important in the past, and the timeline for some of these reportings can sometimes be as short as 30 days. That that seems it it just sounds short. Um, you will have to update the filing of the beneficial owner. So, for example, if you are selling your business to someone, or maybe your uh maybe your son or daughter is taking over the business, you are no longer the beneficial owner, now they are the beneficial owner. So that you have to report. It to me is no different than when you sell a car, then you have to um you have to, you know, tell your titles. Yeah, you have to change the title, you have to change the so so to me, a lot of what I was researching sounded a lot like changing ownership of a vehicle. It really did sound a lot like a title to me.

SPEAKER_00 17:58

Well, to be quite honest, if you're changing ownership of business, you you kind of need to file this with your state anyways. So it's not like you're coming up with something brand new. I guess you never really had to file it on the like the federal level. So but well, I don't know. Well, okay, first of all, I don't know about other states. State of Virginia, you do, but other states may be a little bit more lax, but this makes you file it on the federal level.

SPEAKER_01 18:20

And to be honest, there are some some states that are more uh laxed and have much larger loopholes, yeah, which is why you see people some people starting businesses in certain other states, yeah, which I have seen with some clients, some shady clients that are not clients anymore, where they started a business that was nowhere near the kind of thing that they do in a state that is nowhere near where they live.

SPEAKER_00 18:46

Clients who shall not be named, and states which we will not list. Correct. But you've probably heard of them though. I mean, I don't think it's like uh I guess loophole is a good word for it, but it's basically they're more corporate-friendly states. Correct. So they're there to really protect the company. Yes. And so there's a little bit less, maybe a little bit less disclosure requirements or ways for people to get that information. You have to disclose it to the state, the state actually knows everything.

SPEAKER_01 19:13

Oh, yeah, and also who can't have access to that information has changed. Right. So it's not just about the selling as well. So if you get married or if you get divorced, like your last name changes, then you have to oh my god, kids. Okay. So alright, excuse me.

SPEAKER_00 19:27

All of us see that.

SPEAKER_01 19:28

My my whole like Cinderella crew is here, and my cat has decided that this is her new scratching post, and it's driving me nuts. Call it, we have attracted our audience here. Yes, we do. So you might see like the tail or the name of my pups. Well, my other one just lays there like he's dead. I have to have to focus sometimes to make things. So this is like a weird guest appearance.

SPEAKER_00 19:51

Yeah. So it is one of its new scratching posts, that's why.

SPEAKER_01 19:54

I know. So if you want to know what my workday looks like, this is it.

SPEAKER_00 19:58

So I think that's what it is, is sometimes like these states, um, they they really help kind of uh ensure that information that's reported to them can't be accessed by others. Yeah. And so now we're saying, hey, on a federal level, the federal agencies wants to know what this information is. So now they're requests to report it together.

SPEAKER_01 20:14

Yes, if you change your address, if you obtain a new driver's license, if you um change operationally, if you're if there are operational changes, or if there's a new delegation of authority, let's say that um, let's say it's a situation of where you are now giving the company to your son or daughter, uh, that you are taking on more of a mentorship and consultant role. Well, now your son or daughter is the beneficial owner of this company. You are no longer holding um more than 25% stake. You are just there, whatever it is. And even if you were to sell the business, oftentimes uh in a sale, one of the requirements that uh will happen in a sale is that you work for the company as a consultant for a year or something like that. Like sometimes that a buyout, a buyout uh situation. So in that case, again, you have to change it to the but new beneficial ownership, is it's not you anymore now. It's this this other uh company or entity or person.

SPEAKER_00 21:09

Which by the way, you you have to do all that anyways. Yeah. So it's not like you're coming up. This is info. This is just now you have to report it on different platforms. Exactly. So exactly.

SPEAKER_01 21:19

So so and that is a good that is a good point to make. That there, yes, the CTA is a new thing, but all it is to me is that same thing that you were doing before, but just now.

SPEAKER_00 21:32

Add an extra platform that you have to go report it on.

SPEAKER_01 21:34

Yeah. Uh so and you will have to update your filings if you've changed delegation uh of duties or made any changes in your operation, even if the person themselves own no part of the business. So I guess that could be like a controller, maybe. Uh, or uh uh if you've hired a CFO. No, maybe not that. Maybe more of a control. Maybe it would be someone who's like making the decision. Decisions, but they own no stake in the company, you have to report that as well. They want to know who is controlling the decision making of your business at all times. And that is because if any illicit or illegal things happen, they know who the point of contact is or whom you said is the point of contact.

SPEAKER_00 22:23

They want somebody's neck. Yes.

SPEAKER_01 22:25

They want to know who is going to go to hang, who else they're going to show up at. Exactly. So that's what it boils down to is they want to know who who they're going to pitch for, you know, pitchfork and uh and I believe this happens at every level, too.

SPEAKER_00 22:39

So if you have a company that is owned by another company, it just keeps going. Like it's not that they essentially want to find a person of responsibility in all these, you know, nameless shell corporations. So and then again goes back to it.

SPEAKER_01 22:55

Are they here? Illicit activity has been happening, illegal activity has been happening before it would take them forever to figure it out. We've all watched NCIS, we all know how this goes. Like it takes them forever to figure it out. Well, they want to be able to figure it out before the end of the show credits.

SPEAKER_00 23:10

So this is all the reason why it's here now. Our listeners are probably very honest working people. Obviously, you're not holding up like a whole bunch of shell corporations.

SPEAKER_01 23:22

Oh no, but what you're doing is you are supporting your support, you're distributing the information. You are making it even harder for people to do illegal things. And to be honest, I really again do not see the negative to this because in five years, it will be nearly impossible to do something to be able to launder money as easily as it was as you as maybe an illegal person was able to do it six years ago.

SPEAKER_00 23:50

Wow. Wow. Yeah.

SPEAKER_01 23:53

Like you're just making it harder for the criminals.

SPEAKER_00 23:55

So well, yeah. I mean, again, uh and you're you're already disclosing this information. It's not like you're not. Okay. That's the thing. Yeah, you're already disclosing.

SPEAKER_01 24:04

Okay, so uh so Tiffany had already um alluded to this that if you're a brand new business, or rather, if you are not a brand new business, meaning you started your company prior to January 1st of this year, you have one year to uh to file. If you did start your business just in the last week or so, I don't know where we are in the month until last week or so, you have 90 days. We're still in January. Yeah, we're still in January. Um, you have 90 days to provide this information.

SPEAKER_00 24:32

And that's why we're doing this episode early in the year. So for anybody who's new and decided this is the year they're gonna form their corporation, yeah. So it just don't forget to do this.

SPEAKER_01 24:41

You have 90 days to to uh to file. Um and now, fun fact if you start your business January 1st of 2025. Now, let's say you are a listener who has been listening to us in order to create your new business, and your intention is to start that new business January 1st of next year, you will have 30 days. And everyone, you know, moving forward from that will have 30 days. So that is not a whole lot of time to submit your first report to FinCEN. Uh okay, so two types of reporting companies will be required to submit BOI reports, beneficial owner, uh domestic reporting companies, including LLCs, corporations, that's S Corps and C Corps, and other entities formed through filing with a Secretary of State or a comparable office in the U.S., because not everybody goes through the Secretary of State, uh, not every state requires that. Foreign reporting companies that are registered to conduct business in the U.S. through filing with a Secretary of State or equivalent office, depending on the state you're in. Businesses will not incur a fee for submitting the reports. That's important to know. Electronic forms will be available on FinCEN's website, and again, the link to this source will be posted below. Uh, the new filing requirement is confusing, believe me. Uh, it is cut and dry, but it's not cut and dry if your business is not cut and dry. In the ways in which I've used examples of before with the 50-50 and like all of that stuff. I don't think it's wise to try to take this on your own if your company has nuances. Consult your accountant, your CPA, or your attorney uh when filing your initial and updated reports to ensure they're being done to fin sense standards. I would say though that if your company is pretty cut and dry, there's only one owner, there's only one person making all of the decisions. I think it would be pretty simple to do, but I would still get someone who who is involved in your I think if you're detail-oriented enough, you probably can take a crack at it.

SPEAKER_00 26:44

They put a lot of information online. For sure. They they are trying, like on a pens and website, they are trying to make this as simple as possible. Yeah. Right. Um, and then also the only caveat I would say to lawyers and accountants is let's just be honest, it's new to them too. Yeah. So it's probably just good to have an extra set of eyes. Yeah. But you know, if your business is, I just started, I'm by myself, I have no own, like I have no, like I'm almost pre-revenue at that point. You it probably won't be that complicated for you. Yeah. So you can give it a go, but again, you know, read the information they have.

SPEAKER_01 27:14

It's all it's resources there, and use that hotline to make sure that uh according to msba.org, there are some issues in the law that could require an interpretation of certain facts to determine who is a beneficial owner that must be included in the filings. Uh, if you find yourself in this situation, then consult with your attorney to help you decide how your set of facts fits within the law. If your company's pretty cut and dry, like I said, you may opt to have your accountant or tax repair help you with the filing. However, just know that you might not um you might not be able to find someone who will offer you the service. Reason being, um, errors and omission policies don't cover the service, at least not of as of the airing of the show, as of right now.

SPEAKER_00 28:02

And this is what we're talking about, how this has been circulating for a while and nobody you've just known about it. Right. So everything is catching up.

SPEAKER_01 28:08

Yeah, so maybe it will be, I mean, not maybe, but I'm sure it's going to become a part, but right now it's not. Yeah, yeah. So um, so you may want to uh go to someone whom you truly trust is legitimate and stands behind their work because in the end, if you are relying on someone else to do this for you, then they need to be really sure on all the information that they're they're provide, they're providing.

SPEAKER_00 28:33

And ultimately at the end of the day, it comes back to you. Like you have to know what's going on, right? So, like to be quite honest, the fact that our the aero emissions insurance don't cover this, to be quite honest, a lot of professionals are probably not going to take responsibility, right? So they'll be there and they may give you guidance and free, you know, advice, but not any kind of any kind of like I'll do it for you kind of thing. Exactly, because if their insurance doesn't cover it, the risk is too big on this unknown. But regardless, just like the fact that you signed up for your tax return and you have a tax repair, you need to know enough. And yes, you need to go figure this out. And ultimately responsibility is you because you're the one being fined and you're the one to go to jail. Right.

SPEAKER_01 29:08

So I will say that when it comes to taxes, yeah, if your CPA received incorrect information and filed incorrect information, then your CPA is not the one that gets in trouble, you're the one that gets in trouble. But with the CTA with the Corporate Transparency Act, whoever it is that enters that information in, so that's this is what we're saying. That's why we're I'm breaking it down into layman terms. So if your CPA is the one that you trusted to put that information in, your CPA is the one that's going to end up getting in trouble, not you. Because if the person who files the information is seen as the POC, the point of contact.

SPEAKER_00 29:45

I think it's actually explicit on the form. It is who's the one filing, right? And yeah, because of that, that's what I'm saying. Is I wouldn't be surprised if a professional isn't willing to sign. Yeah, yeah. Because honestly, they don't have insurance to cover something that seems like a moving target at this moment. Yes, even though it's not that much of a moving target. But you know, they're not gonna jeopardize their entire business for this one report. It's cutting the fire on the bomb. Who's doing it? So just maybe don't be surprised, but you know, level up your own knowledge. Yes, you know, take responsibility for it because ultimately it comes back to you.

SPEAKER_01 30:16

Yes. So uh so there are a few sources that I used for uh mining some information, and I thought that they had a lot of lot more to say than what we could put into this show. So those links will also be in our show notes. Um and uh I I really liked there's there's so much to take in. I really, really, really highly suggest that you take the time to educate yourself, as Tiffany said.

SPEAKER_00 30:43

Yeah, and um, of course, we'll link in the Fincent website because that they have good stuff on there too. And then I found a whole bunch of stuff off the score uh's website. And again, you know, they're all trying to stop a U.S. chamber, they're all trying to break it down as easy for you as possible. Um, but I love the fact that even at the source, and Finnson has pretty good stuff.

SPEAKER_01 31:00

Oh, yeah, definitely. Yeah, which those are also going to well, we'll talk about that. We are gonna talk about that later. Okay, so um now uh I don't know, are we gonna move on to a raw? I don't know that there's a raw truth.

SPEAKER_00 31:11

We have no experience, and there's just nobody has experience. Um so but I think we dig over the raw truth. It's the fact like don't be surprised you're not gonna find a lot of professional help that's willing to take the responsibility for this just yet. Right? Again, everything is catching up to it. So unfortunately, you may not be able to wait past the 90 days if you're forming a corporation now or a company now. So um just do it. But and like we were saying too, you kind of have to dig up a lot of this info, anyways, to register of your state to do business in the state. Yeah. Um, so this should not be a surprise. Right. Like the stuff they're asking shouldn't be something that you feel like would go out of your way to go find. Yeah, yeah. You should already have this. Oh, yeah, yeah, absolutely.

SPEAKER_01 31:51

Okay, so um, we're just gonna skip over the raw truth because we we really don't have it. We're gonna go straight to a commercial break. For those of you who are listening to us, I just covered my face and now I'm back. All right. Uh, wouldn't it be great to hear the second of us? Most of me. Promoting your business. She has a better voice. Let's just be honest here. Uh, your business for you right here on our show. Yes, you could have that. Um, and more by producing a show. Shows, Picky. You can produce a little if you like. All you have to do is email us at the businessbehind smallbusiness at gmail.com, express your interest, and we will share with you what you'll receive. You'll have the opportunity to have your name and the name of your business mentioned multiple times during our show, have your company logo on our social media along with details on how to get in touch with you and of other marketing opportunities as well. I mean, if you have one of these lovely posters, then we could always put we could always put one here, or if you there's like a fat tag or something, I can pretend to be you maybe. Or we could just put a cardboard card. Yeah, if there's a cardboard card with us right now. Um, please support us so that we can continue supporting you. So now we are going to move on to a famous example, which in each episode we like to connect a famous example to our discussion to help you relate our talking points on a more global and well-recognized scale, revealing the dots between the living room startup and the success story on the cover of Forbes. Uh, sometimes we use exact examples of either famous persons or successful business owners of today or in history, and then sometimes we use examples of people who inspire us and have inspired today's discussion.

SPEAKER_00 33:42

Funny enough, when I was like uh working on this, my famous example is your famous example. I thought about the same thing. I was like, geez, FINCEN must have a lot of great stories about crimes they busted, and then of course it was there first.

SPEAKER_01 33:59

Uh okay, so I thought I would share with you what FinCEN is and how it came to be. So uh FinCEN is the U.S. Department of Treasury's Financial Crimes Enforcement Network. They are headquartered just up the street, uh Hoot Nahalla from here in Vienna, Vienna, Virginia. Uh FINCEN was established by the order of the Secretary of Treasury in 1990. So yeah, it goes back a long ways. And in 1994, which was 30 years ago now.

SPEAKER_00 34:29

Stop it. Don't do the math on the channel. Yeah, just don't do the math on it.

SPEAKER_01 34:32

Oh, its mission was, you know, sidebar. Um, I saw this thing that said if back to the future were to take place today, he would go back to 1994. And I'm like, shut up.

SPEAKER_00 34:46

Yeah, we already passed the date that he went to the future. Wait, I still don't see a hoverboard around, so they were a little, they were very optimistic about the future.

SPEAKER_01 34:58

You know what's worse is that I if he went back to 1994, I would be older than his parents were. Its mission was broadened to include regulatory responsibilities, and the Treasury Department's precursor of FinCEN, which was the Office of Financial Enforcement, was then merged with FinCEN. So between 19 and 94, there were two different uh departments, and they just merged the two into one so that they could start broadening what its capabilities were. In 1995, FINCEN began to employ an artificial intelligence system. And in 2002, after Title III of the Patriot Act was passed, FENCEN became an official bureau in the Department of Treasury.

SPEAKER_00 35:41

Do you say 1995 they had an AI system? Yeah, that must have been kind of rudimentary, but okay.

SPEAKER_01 35:47

It is actually funny enough, I know someone who works for the search engine.

SPEAKER_00 35:55

The search engine of what? This artificial intelligence system. Well, I mean, I kind of figured they needed some kind of because there's a lot of banking transactions. They're probably sitting there watching a monitoring to see if anything spikes up, but my gosh.

SPEAKER_01 36:09

Well, the hottie reps, like in the White House, and like all the high-rups, they use their own specific search engine, which is which is powered by FNCEN. Okay, to them.

unknown 36:20

Okay.

SPEAKER_01 36:21

Uh so FINCEN generates four reports: uh suspicious activity report, a currency transaction report, a designation of exempt persons and registered money service businesses. Okay, so we're here talking them all out, but you know what? They were part of a scandal. Of course they were, uh, because you know, government. Uh finstein has been part of what is known as the FinCEN Files, uh, which took place in 2020. The FinCEN files include files that banks sent to U.S. authorities for 17 years between 2000 and 2017. The documents show five global banks, um, and all five banks we are familiar with. Uh JP Morgan Chase, Standard Chartered, Deutsch, New York Mellon. Uh, they all moved and HSBC. Oh, it's HSBC. Sorry, I forgot. I forgot HSBC. They moved illicit cash for criminal networks. The document also depicts a financial system that is full of crime and the proceeds that's a playing around for money launderers, country schemers, and other financial criminals. What made it controversial? Here's the best part. The leaked documents showed that although both Vincent and the banks that filed squares knew about billions of doll with a B billions of dollars and dirty money being moved, they both didn't do much about it. Both of them were like, it's okay. Just try to convince me that oligarchs don't rule the world. Speaking of oligarchs in the contact, the United States has more oligarchs within this country than in the entire world. That includes Russia. How? How they have five, we have seven. Isn't that great? So great. Anyway, moving on. Moving on! We're not gonna name any names. Okay, so uh there's a saying that goes, put your money where your mouth is. It sounds to me like oligarchs do that every day. Uh and we're gonna drill down a bit further to connect you with what we discussed at a granular level to tangible sources that you could take to get you to that next level and hopefully get you uh filed by the CTA.

SPEAKER_00 39:00

Well, I mean, uh, we've already kind of mentioned a lot of these resources. We'll all link it down in the show notes. But for me, I particularly like Vincent itself, they had like three pretty easy to use resources and guides. I mean, they're trying to break this down as simply as possible, and then score.org was actually incredibly helpful. So we're gonna link that down below. And then I think you had a few, right?

SPEAKER_01 39:22

Yep, I have sources and links that help you better understand the CTA of how to file. There's more information about CTA that that we did not talk about today, which I mean just goes a little bit more in detail. I don't think I think we covered all the general things that you need to know. And most of my links are from FinCEN, so that you're getting it straight from the source. Um, so please join us for our next episode where we're gonna talk about good habits to prepare for text time 2025. I get it, it's 24, you haven't even gotten through this year yet, but you know, you're gonna find that there are some things you're just not gonna be prepared for this year, but we want to talk to you about all the ways in which you can be prepared, and we're going to have panic and court and not only an HP 24. Exactly. We will have a guest. Her name is Helene Weissman. She is uh CPA with PB Mayors. Uh, we're gonna do some myth busting as well because we're gonna love those. We love myth busting.

SPEAKER_00 40:23

What's out in social about taxes, all those great tax tips you hear. Absolutely.

SPEAKER_01 40:28

So uh we're gonna do some myth busting, we're going to review, maybe we'll do another generalized uh review of CTA, not sure, but mostly we want to make sure that you're prepared for taxes at each level of uh where your business may be. So please show us support by following us on your preferred podcast platform, social media, and YouTube. Uh, we'd love for you to also share our episodes. All of our links are posted below. And until next time, your business behind your business. It was all great successes, sir.