Small businesses often bear the brunt of regulation, and the latest federal raid is no exception. Under a law aimed at reducing money laundering, millions of small businesses could soon be ensnared by onerous reporting requirements and fines for non-compliance.
In 2021, Congress enacted the Corporate Transparency Act (CTA) in a broad effort to tighten anti-money laundering laws. The CTA tasks the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) with identifying shell companies used for illegal transactions and creating a registry of companies with less than $5 million in annual sales and fewer than 20 employees.
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