BY CHRISTINE SOUZA
Ag Alert
Small farmers affected by business reporting requirements by the U.S. Department of the Treasury have been given a reprieve after a whiplash of court orders ended with a temporary injunction last month.
Matthew Viohl, a California Farm Bureau policy advocacy director, said farms affected by the law do not have to file the information—for now.
“The back and forth prior to the Jan. 1, 2025, filing deadline is extremely frustrating for affected farmers,” Viohl said, “but if it is put back in place, our recommendation is to submit the information report if it applies to you.
“Right now, there is no obligation that small farm businesses need to meet this, but it is not permanent, and it could change at any minute,” he added.
The intent of the Corporate Transparency Act, passed by Congress in 2021, was to help root out tax fraud, money laundering and other financial crimes by capturing the ownership information of U.S. businesses. The law requires companies, including farms, to provide personal business information to the department’s Financial Crimes Enforcement Network.
If subsequent court orders favor the Treasury Department, Viohl said he expects businesses will need to file the information by a newly announced deadline. Businesses that fail to provide the information or do not update records when needed could face criminal fines of up to $10,000 and additional civil penalties of up to $591 per day. Failure to file could also lead to criminal charges and up to two years in prison, he added.
“We are telling farm businesses to access the Department of Treasury website, which includes a list of requirements, such as who this applies to and who it doesn’t,” he said. “I would double-check because it gets very granular depending on your business classification, total employees and other metrics.”
Under the federal regulation, affected companies must submit personal information of anyone identified as a beneficial owner and other company information. Beneficial owners are those who exercise substantial control or owns at least 25% of the company. These individuals must submit the following: legal name, date of birth, residential address and an identifying number from a passport or U.S. driver’s license and the name of the issuing state.
Small businesses with fewer than 20 employees are required to report ownership information. However, some exemptions apply, Viohl said.
Many affected farmers are unhappy with the requirement, Viohl said, adding that they have data privacy concerns. In addition, he said the requirement is another example of “more regulatory hoops that our farmers need to jump through.”
American Farm Bureau Federation President Zippy Duvall commented on the nationwide injunction ordered by the federal court last week.
“Farm Bureau appreciates the court’s recognition that a last-minute reinstatement of reporting requirements caused an unwelcome scramble for small businesses, including more than 230,000 farmers,” he said. “Lack of guidance and poor public outreach from the government have left many farmers in the dark about whether they’re expected to file.”
Duvall said the Farm Bureau has long fought against the mandated disclosure of farmers’ private business information to the federal government in a number of different scenarios.
“We hope Congress can take a cue from the courts in the coming weeks to provide a more permanent resolution to this problematic policy,” Duvall said.
The Treasury Department has appealed the decision. Viohl said affected farmers should be ready to comply regardless. The department accepts voluntary beneficial ownership information report submissions.
To learn more or to determine whether your business entity may be required to file a report once the issue is resolved, Farm Bureau members are encouraged to visit the Financial Crimes Enforcement Network portal at www.fincen.gov/boi.
(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)
