Corporate Transparency Act: Can CPAs Or Wealth Adviser Help You?

CTA and Estate Plans and Trusts

The Corporate Transparency Act (“CTA”) is a mandate that requires most smaller closely held business entities to file a rather invasive report with the Financial Crimes Enforcement Network of the Treasury Department. The CTA has been written about extensively, but it seems that most business entities, and their owners and those controlling them have not addressed compliance yet. When it comes to estate planning, and particularly entities owned by trusts, determining who has to file as a beneficial owner is particularly complicated. That is a real issue because the penalties are about $600/day and jail time for non-compliance is even possible. So, if you might be affected, or any entity you are involved with might be a reporting company, or a trust you created or serve on, or hold powers over, might be impacted, you need to investigate filing. With wealth advisers often being the primary or initial advisers people call, they may be the first to help clients understand that they have to look into whether the CTA applies to them. Also, as wealth advisers often have the most frequent contact with clients of any advisers, they may be the ones present when the questions about the CTA arise. CPAs, who file tax returns, seem like a natural to call as the data reported for the CTA feels similar to the income tax filings CPAs routinely deal with. Yes, but. The “but” is a big one, the risk of the unauthorized practice of law or “UPL.” While this all sounds too technical for non-professionals to have to deal with, the three letter U-P-L may have a huge impact on what happens with CTA filing obligations.