Hello

An Alabama Federal Court has slapped down the FinCEN program.  In a surprising summary judgement ruling Friday night, Judge Liles Burke said that the Corporate Transparency Act (CTA)—which sets up the whole FinCEN registration program—is unconstitutional. (I explain in more detail in this NEW YouTube video)

For now, put the FinCEN registration of your corporation, LLC, limited partnership, etc. on hold.  I am sure the case will be appealed by the government, so we haven’t heard the last of FinCEN.  The government has too much invested in the whole FinCEN thing to just let it drop.  I suspect it will be a year or so before they can get things “fixed.” 

The judge actually outlined how the government could make the CTA constitutional by rewriting the law.   

He found that the law didn’t even come close to being constitutional.  Thus, the summary judgement. 

He also said that the penalties imposed by FinCEN for not complying with all the registration requirements ($500 for every day late, PLUS $10,000 penalty, PLUS 2 years in jail) were “offensive, unfair, and outrageous.” 

He also pointed out that this was basically just a trap for the small business owners. 

In my opinion, it will be nearly impossible to comply with the FinCEN registration law as it stands.  Not only is there a complicated registration, with the most personal information for everyone involved in ownership or benefit from the company, but there are ongoing requirements. 

Anytime a beneficial owner changes address, gets a new driver's license, changes ownership interest, or does a half-dozen other things, the company has to report to FinCEN within 30 days.  For the company to monitor every owner and even its own activities to that extent would be nearly impossible.  There will be slip-ups. 

The Beneficial Ownership registration program is just a way for the government to take out the little companies it doesn’t like for some reason.  If you pollute too much—like the farmer who raises cattle (we are already down a billion pounds in beef production this year)—if you are doing something politically incorrect, if you cross someone with political power, or any one of dozens of other reasons to be targeted by a federal agency, they can play the FinCEN gotcha game.  That’s how dangerous I think this law is. 

For now, put your FinCEN registration on hold.  I am sure there will be updates.