The Florida Bar

Florida Bar Journal

FinCEN Fenced In? CTA Held Unconstitutional, but Filing To Continue

Tax

On March 1, 2024, the federal district court for the Northern District of Alabama issued a memorandum opinion, National Small Business United d/b/a National Small Business Association, et al. v. Yellen, Case No. 5:22-cv-01448 (N.D. Ala.),[1] granting summary judgment for the plaintiffs holding the Corporate Transparency Act, 31 U.S.C. §5336 (2024) (the CTA or the act)[2] unconstitutional and enjoining the Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN) from enforcing the CTA against the plaintiffs. The ruling has provoked similar lawsuits[3] and substantial media coverage.[4]

FinCEN has filed an appeal to the 11th Circuit Court of Appeals.[5] In a notice issued March 4, 2024, updated on March 11, FinCEN announced that it intends to continue implementation and enforcement of the CTA, but that the named plaintiffs and members of the National Small Business Association (NSBA)[6] as of March 1, 2024, would not be required to report beneficial ownership under the CTA at this time.[7]

The CTA

Briefly, the CTA, as implemented by final rules[8] issued by FinCEN, requires a reporting company to file a beneficial owner report with FinCEN no later than January 1, 2025, if in existence prior to January 1, 2024. Otherwise, a report must be filed within 90 days of its formation or registration.[9] Unless falling under a specific exemption provided in the act, a reporting company is either a domestic corporation, limited liability company, or any entity that is created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe, or a foreign corporation, limited liability company, or other entity registered to do business under state law. Given the range of statutory exemptions,[10] it is arguable that the CTA applies primarily to small businesses.

The beneficial owner report must disclose the identity of, and certain identifying information about, the reporting company’s beneficial owners, defined as any individual who exercises substantial control over the entity or who owns or controls not less than 25% of the ownership interests of the entity. Exceptions are provided for minor children, creditors, and others.[11] The information to be provided includes the beneficial owner’s legal name, date of birth, current address, and an identification number from a driver’s license, identification card, or passport, along with an image of the source document. Changes are to be updated within 30 days. The reported information is to be kept by FinCEN in a secure database, intended to be accessible under varying restrictive protocols by federal agencies; state, local, tribal, and foreign governments; and financial institutions.[12] The CTA prescribes substantial civil and criminal penalties for willful noncompliance and for violation of its access and security rules.[13]

The Opinion

The court first addressed the issue of standing for the named plaintiffs. For the individual plaintiff, the court found concrete, imminent, and redressable injury in the compelled disclosure to FinCEN of the individual’s personal information, notwithstanding that some of the information already was disclosed (and easily discoverable) on tax returns, passport forms, and bank account applications. The court emphasized that the injury was not disclosure per se, but disclosure to FinCEN as the Treasury’s criminal enforcement division.[14] The court also found that the named individual plaintiff, Isaac Winkles, had standing to challenge the CTA’s requirements regarding applicants[15] based on the CTA’s penalty provisions.[16] As for plaintiff NSBA, the court found associational standing through the individual plaintiff’s membership.

The court then moved on to a constitutional review of the CTA.[17] Finding that incorporation under state law is purely an internal affair “traditionally left to the [s]tates,” the court rejected the government’s argument that the CTA was supported under Congress’s foreign affairs and national security powers and the Constitution’s Necessary and Proper Clause, based on the CTA’s stated purposes that include curbing foreign money laundering and other malign foreign influences.[18] The government’s argument that the CTA was constitutional as incidental to Congress’s taxing power because the CTA penalties are a form of tax, or that the information collected under the CTA would assist in efficient tax administration because it is accessible by the Department of the Treasury, was rejected as overbroad.[19]

The court focused primarily on the government’s argument that the mere act of incorporation was sufficient to invoke the government’s Commerce Clause powers to require reporting of beneficial ownership by every U.S. corporation, limited liability company, or similar entity not exempt under the act. The court noted that the CTA “is not a facial regulation of commercial activity,” and that the government conceded that “[i]t is the activities of these entities, not the mere fact that they submitted documents to a Secretary of State, that implicates the Commerce Clause.”[20]

The court found that the connection between incorporation and the activity sought to be regulated is “far too attenuated to justify the CTA,”[21] and that “entities constituting CTA reporting companies frequently utilize the channels of interstate commerce” is not sufficient grounds to regulate “most [s]tate entities, not just entities that move in commerce.”[22] The court held that the Commerce Clause does not allow Congress “to regulate an entire class just because some members of the class use the channels and instrumentalities of commerce.”[23] It further noted that CTA does not regulate economic or commercial activity on its face,[24] nor is there any “express jurisdictional element that might limit its reach to a discrete set of [activities] that additionally have an explicit connection with or effect on interstate commerce.”[25]

The court went on to discuss what Congress might have done to allow the CTA to “pass constitutional muster,” such as by imposing disclosure requirements on state entities as soon as they engaged in commerce, or by prohibiting the use of interstate commerce to “launder money, ‘evade taxes, hide…illicit wealth, and defraud employees and customers.’”[26] But with all the complaints about the burden the CTA places on small businesses to make determinations of substantial control and ownership, the court’s suggestion would seem to add to that burden by requiring every potential reporting company to determine if it is engaged in interstate commerce and, thus, required to file, and if not yet so engaged, to repeat that exercise frequently to avoid a late filing penalty. Another view might be that since it is so difficult for any business entity to avoid becoming involved in interstate commerce, in most cases, responsible counsel would advise CTA compliance upon formation of a new potential reporting company, and that pre-existing reporting companies should file by the January 1, 2025, deadline.

The court also dismissed the government’s argument that “the CTA is necessary and proper to carry out a legitimate exercise of Congress’s commerce powers,” finding that the CTA was not essential because FinCEN’s 2016 customer due diligence rules for financial institutions (the CDD rules)[27] provide much the same information in a constitutional manner.[28]

Finally, the court rejected any “appeals to congressional findings” as insufficient to sustain the constitutionality of Commerce Clause legislation, citing United States v. Morrison, 529 U.S. 598, 614 (2000).[29] The court did not reach the plaintiffs’ claims under the First, Fourth, or Fifth Amendments, and did not discuss Ninth or 10th Amendment issues.

What Can Be Done Without Legislation?

As noted, Treasury has appealed the district court decision to the 11th Circuit, and it seems likely that the Supreme Court will eventually have the final say in this or another case attacking the CTA’s constitutionality.[30] So far, FinCEN seems dedicated to keeping the reporting system in place, including the January 1, 2025, filing deadline for pre-existing reporting companies, and requiring newly formed reporting companies to file a timely report.

FinCEN has previously resisted calls from Congress and business interests to delay the implementation of the CTA, and at this point pausing CTA filing voluntarily may not be a realistic option.[31] FinCEN undoubtedly has added staff[32] to deal with the anticipated high volume of 2024 CTA filings, to build and implement the secure database for storing beneficial owner information, and to develop access protocols, staff that seemingly would have to be reassigned or furloughed in the event of a delay, with potentially adverse future staffing and budget consequences when filing resumed.[33]

There may be an unstated reason why FinCEN has resisted delay up to this point. The impetus for U.S. corporate transparency legislation began with a 2006 report by the Financial Action Task Force (FATF)[34] criticizing the U.S. for not collecting beneficial ownership information in accordance with FATF standards.[35] But the initial U.S. legislative attempt to comply, the 2008 Incorporation Transparency and Law Enforcement Assistance Act[36] never was acted on, and (other than the same bill being introduced for the next three years) no new legislative efforts followed until a second FATF critical report in 2016.[37] Several more unsuccessful legislative efforts followed the 2016 report,[38] and it was not until 2021 that the CTA was finally enacted. It is notable that almost all of the legislative attempts prior to the CTA heavily emphasized the negative FATF report(s) in their respective congressional findings, but the CTA did not even mention the FATF.

It would seem obvious that Treasury has wanted to implement the CTA sufficiently to avoid another negative evaluation of the U.S. anti-money laundering efforts. On March 29, 2023, the U.S. committed at the Summit for Democracy Commitment on Beneficial Ownership and Misuse of Legal Persons that it would effectively implement the revised FATF standard on transparency and beneficial ownership of legal persons,[39] now focusing on whether member countries are implementing and making use of the laws, regulations, and policies that are being passed.[40]

In interesting coincidental timing, the FATF announced on March 26, 2024, that the U.S. has been upgraded to “largely compliant” with FATF Recommendation 24, relating to beneficial ownership transparency.[41] The report details the U.S.’s progress in addressing deficiencies in its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime specific to Recommendation 24, including the ongoing implementation of the CTA.

But delay may well come from a different direction, as preexisting reporting companies may react to the district court ruling by delaying their CTA filings to see if the ruling will be reversed or upheld. If the district court ruling is reversed on appeal in 2024 (assuming no other adverse rulings), then there may be a huge volume of late-year filings that might overwhelm FinCEN’s online system, with 37.6 million CTA filings expected in 2024.[42] Although, only 430,000 beneficial owner reports had been filed by mid-February 2024.[43] At some point, FinCEN may have to become concerned about system capacity.[44] If no final decision on constitutionality is reached in 2024, FinCEN may have to cope with the additional pressure of determining how to deal with a substantial number of non-filers.

Congressional pressure may mount for FinCEN to defer CTA filing. The Protect Small Business and Prevent Illicit Financial Activity Act (H.R. 5119, 117th Cong., 1st Sess.) was passed by the House on December 12, 2023. An identical Senate bill (S. 3625, 117th Cong., 2d Sess.) was introduced on January 18, 2024, both bills being referred to the Senate Committee on Banking, Housing and Urban Affairs. If enacted, the CTA reporting deadline for preexisting reporting companies would be deferred for up to a year.

In the meantime, the clock is also ticking on the final regulations project under the CTA, that of revising the CDD rules to conform with the reporting obligations under the CTA, required to be done by December 31, 2024. The CTA specifically requires Treasury to rescind 31 C.F.R. §1010.230, paragraphs (b) through (j), effectively the entirety of the CDD rules other than the general obligation of financial institutions to identify and verify beneficial owners of legal entity customers.[45] In view of the banking lobby’s strong criticism of the access regulations when proposed by FinCEN,[46] the harmonization of the CDD rules with the CTA rules may not be an easy task and may draw further scrutiny from Congress.

What Could Congress Do if the CTA Is Ultimately Held Unconstitutional?

The district court’s ruling goes to the core of the CTA: the requirement for filing beneficial owner reports at the time of the reporting company’s formation or registration. If the CTA is ultimately held unconstitutional, Congress could amend the CTA to add the interstate commerce “jurisdictional hook” suggested by the court,[47] but at the cost of at least some delay to allow Congress time to act and FinCEN time to amend its rules. While most potential reporting companies might voluntarily file beneficial owner reports because of the perceived difficulty of avoiding being engaged in interstate commerce (particularly if filing within the CTA timeframes as a “safe harbor”), non-filers might claim to not be so engaged, presenting an additional hurdle to CTA enforcement.

However, is it certain that an (amended) CTA could pass Congress again? Eight predecessor versions dating back to 2008 failed to pass, most barely proceeding. Proponents found it preferable to fold the CTA into the Anti-Money Laundering Act of 2020[48] (the AMLA) as an amendment to the NDAA rather than submit it to a vote on its own merits.

FinCEN has been somewhat of a target for congressional ire. Despite being one of the original sponsors of the CTA, Rep. Patrick McHenry (R-NC), current chair of the House Financial Services Committee, was critical of FinCEN even before the CTA was enacted, requesting that FinCEN provide data about its “effectiveness in targeting bad actors” and to justify the then-proposed new reporting regime with “the burdens it is placing on legitimate companies.”[49] Rep. McHenry and others further questioned whether the significant financial burden placed on financial institutions by the CDD rules and the requirement to file suspicious activity reports (SARs) under the Bank Secrecy Act[50] (the BSA) has resulted in useful law enforcement information, and threatened to limit CTA funding for FinCEN.[51] While the AMLA contains requirements for various effectiveness studies,[52] that may be a sticking point for any effort to restore the CTA, particularly if the proponents cannot better justify the cost of imposing the reporting and updating requirements on U.S. small businesses, and better address how to educate small businesses about the reporting obligation. Congress might choose to simplify the CTA reporting requirements, in view of criticism that, compared to the CDD rules, FinCEN’s approach was too complex for small business.[53]

Other legislative options may be less attractive. One alternative Congress might explore is that of relying on the CDD rules and information available to the Internal Revenue Service (IRS), as suggested by the American Bar Association (ABA) in comments to the House Financial Services Committee as the CTA was being developed.[54] But that alternative might not be enough to satisfy transparency advocates without being more fully developed. Since most reporting companies will need an employer identification number (EIN) and will file federal tax returns, since most EINs are obtained online, and since Form SS-4’s “responsible person” requirement is already fairly close to the CTA’s definition of “substantial control,” the Form SS-4 information requirements (in theory) could be expanded to match most of the current CTA disclosure requirements and to create a secure beneficial ownership database. Updating could be accomplished by emphasizing Form 8822-B. Internal Revenue Code (I.R.C.) §6103(i)(1) already provides for tax information confidentiality while authorizing the IRS to share tax information with law enforcement agencies pursuant to court order for investigation and prosecution of non-tax criminal laws, and that might be expanded to cover disclosure equivalent to that contemplated by the CTA and FinCEN’s final access rules.[55] But the IRS remains in dire need of modernizing its technology[56] and may not want to undertake this additional responsibility or incur additional budget battles with Congress.

Congress may choose a different direction, continuing its long campaign to impose anti-money laundering obligations on attorneys and others. That campaign dates back at least to the 1984 enactment of I.R.C. §6050I and the introduction of Form 8300, requiring attorneys and others to report the receipt of more than $10,000 in cash in a single transaction or related transactions.

Following the 1989 formation of the FATF[57] and the FATF’s identification of lawyers and accountants as gatekeepers of international finance,[58] the ABA formed the Task Force on Gatekeeper Regulation and the Profession in 2002.[59] A 2003 ABA policy statement[60] opposed compelling “lawyers to disclose confidential information to government officials or otherwise compromise the lawyer-client relationship or the independence of the bar,” while recommending review of the Model Rules of Professional Responsibility to evaluate permitting “disclosure of information demonstrating the clear intent of a client to commit criminal acts such as money laundering.” The ABA also joined in the joint statement by the International Legal Profession to the FATF (April 2003)[61] in response to pending revisions by the FATF of its 40 recommendations for fighting money laundering that would have applied to transactional lawyers.[62]

In 2005, the task force issued FAQs[63] warning of proposed legislation that would impose gatekeeper regulations on lawyers, including anti-money laundering provisions of the BSA. The FAQs also noted the FATF had determined that lawyers should be treated as financial institutions, subject to the CDD rules and the obligation to file SARs on clients.

Following the FATF’s 2006 report[64] criticizing the U.S. as not compliant with FATF standards, the Incorporation Transparency and Law Enforcement Assistance Act[65] was introduced in May 2008, seeking to impose anti-money laundering obligations on attorneys and others as “formation agents.” The ABA responded with Resolution 300 in August 2008, urging Congress to refrain from enacting “legislation that would regulate attorneys in the formation of business entities,” while encouraging development of voluntary risk-based approaches to client due diligence and compliance with anti-money laundering legal requirements.[66] Shortly thereafter, the FATF released its “Risk-Based Approach Guidance for Legal Professionals,”[67] and the ABA adopted its own “Voluntary Good Practices Guidance for Lawyers to Detect and Combat Money Laundering and Terrorist Financing” in August 2010.[68]

In May 2012, the ABA commented[69] on FinCEN’s advance notice of proposed rulemaking for the CDD rules, objecting to language that suggested FinCEN would require attorneys depositing advance legal fees in trust accounts or establishing new bank accounts for clients to disclose confidential client identity and beneficial ownership information. The ABA letter noted that it, along with international law societies and bar associations, had actively engaged with the FATF to update and refine the FATF’s recommendations.

The ABA issued Formal Opinion 463, “Client Due Diligence, Money Laundering and Terrorist Financing,” on May 23, 2013,[70] and sent a second letter to FinCEN regarding the CDD proposed rules on October 3, 2014, suggesting that attorney trust accounts should be included in the exemption from beneficial ownership disclosure for accounts opened on behalf of another.[71] Late in October 2014, the ABA, the International Bar Association and Council of Bars and Law Societies of Europe published, “A Lawyer’s Guide to Detecting and Preventing Money Laundering.”[72] The final CDD rules omitted attorneys from coverage.[73]
Legislative efforts resumed in 2016 and 2017, but did not progress.[74] The 2016 FATF report[75] took the position that although the AML/CFT regulatory framework in the U.S. was “well developed and robust,” the framework had some significant gaps, including the lack of strict federal AML/CFT and SARs regulations on lawyers, accountants, and other non-financial businesses and professions. Combined with the “growing desire by the large banks to shift their beneficial ownership reporting obligations to small businesses, and increased media attention,” the FATF report “created additional momentum for several beneficial ownership bills to advance.”[76]

Another contributing factor to the renewed legislative interest was the publication of the Panama Papers in April 2016, and the Paradise Papers in November 2017, by the International Consortium of Investigative Journalists. While those revelations primarily involved non-U.S. taxpayers, they focused attention on the use of shell companies in general, and on the use of the U.S. by foreign investors as a tax haven, as well as a means of avoiding the common reporting standards approved by the Organization for Economic Co-operation and Development in 2014.[77]

In 2019, Congress shifted gears to develop the reporting mechanism that came to fruition in the CTA, requiring the reporting company to file its beneficial ownership report with FinCEN. The direct predecessors of the CTA, the 2019 Illicit Cash Act and the 2019 CTA,[78] abandoned the attempt to treat attorneys as gatekeepers or as financial institutions, although the latter would have required reporting of the applicant, defined as “any individual who files an application to form (a reportable entity).”[79] While the ABA protested the 2019 proposals on general grounds, and made specific comments,[80] the main basis for its ongoing protests of the legislation had been abated. The ABA Business Law Section commented on FinCEN’s proposed reporting rules, but the ABA did not actively protest the CTA.[81]

However, the battleground had merely shifted. In October 2021, the ENABLERS Act (H.R. 5525) was introduced in the House, proposing to amend the BSA to define various “middlemen,” (including investment advisers, attorneys, or notaries involved in financial activity or related administrative activity on behalf of another person, service providers involved in forming a corporation or other similar entity, registered agents, trustees or nominees, trust companies, and certified public accountants) as financial institutions, required to file SARS, and to have AML/CFT programs and customer due diligence policies, as well as being made subject to FinCEN audits.[82] In a press release, co-sponsor Rep. Joe Wilson (R-SC) stated bluntly that “unscrupulous lawyers, accountants, and others” that allegedly fail to conduct adequate due diligence in international transactions are the “U.S. enablers of kleptocracy.”[83]

The ENABLERS Act passed the House in July 2022, as part of the 2023 National Defense Authorization Act. The ABA protested the proposed legislation in a July 5, 2022, letter to Senate leaders[84] and again on October 5, 2022.[85] In August 2023, the ABA House of Delegates passed Revised Resolution 100, amending ABA Model Rule of Professional Conduct 1.16 to require attorneys to conduct due diligence on clients throughout the representation to determine whether the representation can be continued, and to resign the engagement if the client persists in a course of action involving the attorney’s services that the attorney reasonably believes is criminal or fraudulent. The ENABLERS Act was removed from the NDAA by the Senate Banking Committee in December 2022, on grounds that it should not be attached to a funding bill but should go through regular legislative processes.[86]

Rather shockingly, the passage of Revised Resolution 100 appears to have been forced by the Treasury Department. Kevin Shepherd, ABA treasurer and representative to the Treasury Department and the FATF, told the delegates that Treasury informed him that the failure of the ABA to adopt the revised resolution would cause Treasury “to explore every means available in its regulatory toolkit to impose anti-money laundering regulations on the legal profession.”[87]

Treasury’s aggressive posture may be informed by the current administration’s December 2021 strategy on countering corruption.[88] While that document primarily focuses on investment advisors[89] and private equity funds, it hints at AML/CFT and SARs responsibility for lawyers, accountants, trust and company service providers, incorporators, registered agents, and “those who act as nominees to open and move funds through bank accounts.”[90]

Most recently, on February 7, 2024, FinCEN issued a notice of proposed rulemaking that would extend its geographical targeting orders to virtually all non-financed residential real estate purchases by a legal entity or trust, regardless of geographic location or value, with certain exceptions.[91] The reporting obligation, previously imposed on title companies, would extend to attorneys for the buyer and the seller, and to all others involved in the closing,[92] and would require information about the transferor as well as the transferee and their representatives. FinCEN has indicated that it intends to extend similar reporting requirements to commercial real estate later in 2024.[93] Note that FinCEN’s advance notice of proposed rulemaking[94] included discussion by FinCEN about extending AML/CFT requirements to persons involved in real estate closings. The ABA filed substantial comments.[95]

Conclusion

Attorneys should continue to monitor the status of the CTA and client filing obligations pending resolution of the court challenges or alternative action by FinCEN or Congress. However, close attention should also be paid to the continuing federal efforts to impose anti-money laundering obligations on attorneys.

[1] The named plaintiffs included Isaac Winkles, an individual member of the National Small Business Association and beneficial owner of at least one reporting company.

[2] Enacted as Title LXIV, §§6401-6403 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Pub. L. No. 116-283 (H.R. 6395), 134 Stat. 338, 116th Cong. 2d Sess. (NDAA) While the CTA incorporates §6403 (its only substantive section) into 31 U.S.C. Ch. 53, Subch. II, as §5336, all references herein are to the section numbers of the NDAA unless otherwise stated. The CTA as enacted, as codified, and applicable regulations can be most easily found on the FinCEN website. FinCEN, Reference Materials, https://www.fincen.gov/boi/Reference-materials. See also Jonathan H. (Jason) Warner, Corporate Transparency Act to Have Major Impact on Clients and Attorneys, 95 Fla. B. J. 38 (Nov./Dec. 2021), and Corporate Transparency Act Reporting Rules Finalized, But Will Access Issues Cause Delay?, 97 Fla. B. J. 26 (Sept./Oct. 2023).

[3] Another suit, however, seeking a nationwide injunction, was recently filed and served in the Northern District of Ohio. See Robert J. Gargasz Co. v. Yellen, No. 1:23-cv-02468 (N.D. Ohio, Dec. 29, 2023); see also Boyle v. Yellen, No. 2:24-CV0081 (D. Maine, Mar. 15, 2024); Small Business Association of Michigan et al. v. Yellen, No. 1:24-cv-314 (W.D. Mich., Mar. 26, 2024).

[4] Perhaps the most extreme comment was from one of the transparency advocates. In a Fact Coalition press release dated March 4, 2024, executive director Ian Gary, was quoted as saying “(t)his is a pro-crime, pro-drug cartel, pro-fentanyl ruling which undermines the rule of law and allows criminals to use anonymous shell companies to hide their dirty money from law enforcement.” See Zorka Milin & Erica Hanichak, District Court Ruling Undermines U.S. Fight Against Dirty Money, FACT Coalition (Mar. 4, 2024), https://thefactcoalition.org/district-court-ruling-undermines-u-s-fight-against-dirty-money/. Two amicus briefs have been filed by coalitions of transparency advocates and another by a group including the congressional sponsors of the CTA. See FACT Coalition, Final Amicus Brief, https://thefactcoalition.org/wp-content/uploads/2023/04/34-Final-Amicus-Brief-as-filed.pdf; Transparencey International U.S., Amicus Brief in Support of the Corporate Transparency Act, https://us.transparency.org/resource/amicus-brief-in-support-of-the-corporate-transparency-act-cta/; and U.S. Senate, Amicus Brief in Support of Defendants-Appellants, https://www.whitehouse.senate.gov/wp-content/uploads/2024/04/2024.4.22-Congress-CTA-Amicus-Final-Draft-FILED.pdf. Another has been filed by the NYU Tax Center. NYU Law, Amicus Brief in Support of Appellants, https://www.law.nyu.edu/sites/default/files/Tax%20Law%20Center%20amicus%20brief_0.pdf.

[5] Scott Greytak, Court Erred in Finding Transparency Act Unconstitutional, Amici Say, Taxnotes (Apr. 19, 2024), https://www.taxnotes.com/research/federal/other-documents/other-court-documents/court-erred-finding-transparency-act-unconstitutional-amici-say/7jg3l.

[6] The NSBA website claims 65,000 members. See NSBA, Our NSBA Members, https://www.nsba.biz/membership.

[7] The case did not consider foreign companies registering to do business in a state.

[8] 31 C.F.R. §1010.380 (2023) (final reporting rules, as amended); see also 31 C.F.R. 950 and 31 C.F.R. 955 (2023) (access and safeguards provisions).

[9] The CTA requires filing within 30 days following confirmation of formation, but FinCEN issued an extension for reporting companies formed in 2024. 88 Fed. Reg. 83499 (2023).

[10] CTA §6403(a)(11)(B).

[11] Opinion at 5, citing U.S.C. §5336(a)(3) (2022).

[12] CTA §6403(c) and FinCEN rule, 88 Fed. Reg. 88752 (2023).

[13] CTA §6403(h). While FinCEN has indicated in the preamble to the final reporting rules (see FinCEN, Beneficial Ownership Information Reporting Requirements, 87 Fed. Reg. 59498, 59515 (2022)), that it does not expect that an inadvertent mistake by a reporting company acting in good faith after diligent inquiry would constitute a willfully false or fraudulent violation, the CTA’s penalty provisions are daunting, with strict liability for senior officers of a reporting company, with no ceiling on aggregation of the daily civil penalty, and only a limited safe harbor for correcting erroneous information. FinCEN has endeavored to provide a method for a reporting company to indicate that it cannot obtain the required information from a beneficial owner, but that has been met with opposition from transparency advocates, and would be prohibited by pending legislation. See note 51. Little attention is being paid to the serious difficulty some reporting companies will face in monitoring for reportable changes in beneficial owner information, with no relief provisions.

[14] Opinion at 11.

[15] The CTA defines an applicant as the in dividual who directly files the document that creates a domestic reporting company or first registers a foreign reporting company, and the individual “primarily responsible for directing or controlling such filing if more than one individual is involved in the filing of the document.”

[16] Opinion at 12, in a strange digression about the meaning of “person” as used in the CTA.

[17] Prior to the NSBA lawsuit, the only published article discussing the constitutionality of the CTA was Brendan O’Leary, The Corporate Transparency Act: A Step Toward Broken Shells, 47 J. LEGIS 133 (2021). While the article did not discuss commerce clause issues, it did raise another potentially important issue, that of judicial deference to federal regulations.

[18] CTA §6402 (3)-(5).

[19] Opinion at 49-52.

[20] Opinion at 35-36, noting at 40 that “incorporation is not an economic activity.”

[21] Opinion at 36. At p. 28, the opinion cites the codified act rather than the actual CTA legislation to claim that the term “commerce” is not even mentioned in the CTA, missing the language in CTA §6402(5) that collecting beneficial ownership information is needed to “protect interstate and foreign commerce.” That does not mean the court is necessarily wrong in its holding that mere incorporation does not invoke the Commerce Clause, but that mistake might be used by the government on appeal to show some degree of error, particularly since the opinion (at p.45) cites CTA §6402(6).

[22] Opinion at 30. The court also noted (at 34) that not even “a near certainty of future conduct” is enough to invoke the “substantial effects” commerce power.

[23] Opinion at 32.

[24] Opinion at 43.

[25] Opinion at 45, citing Lopez, 514 U.S. at 562 and 31 U.S.C. §5336.

[26] Opinion at 32-33.

[27] 31 C.F.R. §1010.230.

[28] Opinion at 44-45.

[29] Opinion at 48.

[30] See note 3.

[31] On April 3, 2024, the American Institute of Certified Public Accountants and over 50 state CPA societies wrote a letter to FinCEN suggesting that FinCEN suspend all enforcement activity for a year. See AICPA, Letter to FinCEN, https://www.cpa.com/sites/cpa/files/2024-04/2024_FinCEN_BOI_Delay_Enforcement_AICPA_State_CPA_Societies.pdf.

[32] Note that while an April 27, 2023, written statement by then Acting FinCEN Director Himamauli Das, prepared for a budget hearing before the House Committee on Financial Resources, claimed that FinCEN had “filled 95 positions” for implementing the CTA and related legislation; see FinCEN, Statement of FinCEN Acting Director Himamauli Das, https://www.fincen.gov/news/testimony/statement-fincen-acting-director-himamauli-das-house-committee-financial-services-0; a written statement by new FinCEN Director Andrea M. Gacki for a February 14, 2024, hearing before the same committee noted FinCEN as having 300 employees, the same spartan staffing level that prevailed at FinCEN before passage of the CTA; see FinCEN, Statement of FinCEN Director Andrea Gacki, https://www.fincen.gov/news/testimony/statement-fincen-director-andrea-gacki-house-committee-financial-services. See also FinCEN, Prepared Remarks of FinCEN Acting Director Himamauli Das, https://www.fincen.gov/news/speeches/prepared-remarks-fincen-acting-director-himamauli-das-during-nyu-laws-program. It appears, however, that the number of “contractors” for the agency varies from time to time.

[33] FinCEN has had political difficulty with its budget already, most recently with the House Financial Services Committee balking at increasing FinCEN’s 2024 budget to $228 million from 2023’s $190 million.

[34] Established in 1989 by the Group of Seven countries, the FATF is a global inter-governmental body (of which the U.S. is a founding member) that sets international standards to combat money laundering and terrorist financing.

[35] FATF, Third Mutual Evaluation Report on Anti-Money Laundering and Combating the Financing of Terrorism, www.fatf-gafi.org/media/fatf/documents/reports/mer/MER%20US%20full.pdf.

[36] S. 2956, 110th Cong. 2d Sess. The legislation would have required business entities to maintain a record of beneficial owners available to law enforcement and subjected “formation agents” (attorneys and service providers) to anti-money laundering obligations. Collection of information would have been done by states.

[37] FATF, United States’ Measures To Combat Money Laundering and Terrorist Financing, www.fatf-gafi.org/publications/mutualevaluations/documents/mer-united-states-2016.html.

[38] The 2016 Incorporation Transparency and Law Enforcement Assistance Act (ITLEAA, H.R. 4450, 114th Cong. 2d Sess.) would have required Treasury to issue regulations requiring corporations and limited liability companies to file beneficial ownership information with Treasury and would have required persons engaged in corporate formation to establish anti-money-laundering programs. The 2016 CLAMP Act, “Closing Loopholes Against Money-Laundering Practices” (S. 2956, 110th Cong. 2d Sess.) would have amended the Internal Revenue Code to require every U.S. entity to obtain an EIN and divulge the name of its “responsible party,” with information available to other law enforcement. The 2016 Counter Terrorism and Illicit Finance Act (unnumbered draft) would have required companies and attorneys to submit beneficial ownership information to FinCEN (H.R. 6068, 116th Cong. 2d Sess.) was the same, without the beneficial ownership requirement. The 2017 True Incorporation Transparency for Law Enforcement Act (“TITLE Act,” S. 1454, 115th Congress, 1st Sess.) would have required companies and lawyers to maintain client identification information, available to law enforcement, but would have exempted lawyers from requirements applicable to formation agents. The 2017 Corporate Transparency Act (H.R. 3089, 115th Congress, 1st Sess. and S. 1717, 115th Congress, 1st Sess.) was similar, including reporting by formation agents, but also would have made them “financial institutions” under the Bank Secrecy Act, required to file SARs. The 2019 True Incorporation Transparency for Law Enforcement Act (S. 1889, 116th Cong. 1st Sess.) would have required reporting of all ownership interests in the business entity to the state of formation. The 2019 Illicit Cash Act (S. 2563, 116th Congress, 1st Sess.) and the 2019 Corporate Transparency Act (H.R. 2513, 116th Congress, 1st Sess.) (2019 CTA) may be seen as the precursors of the 2021 CTA, departing from previous versions by proposing a federal database with direct applicant filing (rather than requiring the states to begin collecting such information at the time of entity formation and through annual reports) and placing the burden directly on the entity rather than attorneys and other “gatekeepers” involved in the incorporation or equivalent process, as was the case in prior versions (although still involving an attorney as an “applicant” if filing the formation document). The 2019 CTA passed the House in late 2019 with a comfortable margin, but failed to move in the Senate. After revision, it was introduced as an amendment to the NDAA to become the 2021 CTA. See note 2.

[39] See U.S. Dept. of State, Summit for Democracy Commitment on Beneficial Ownership and Misuse of Legal Persons, https://www.state.gov/summit-for-democracy-commitment-on-beneficial-ownership-and-misuse-of-legal-persons/. The commitment seems related to the Biden administration’s United States Strategy on Counting Corruption. The White House, FACT SHEET: Implementing the United States Strategy on Countering Corruption, https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/29/fact-sheet-implementing-the-united-states-strategy-on-countering-corruption-accomplishments-and-renewed-commitment-in-the-year-of-action/. Those standards contemplate some degree of governmental-level auditing of entities to verify beneficial ownership information. FATF Guidance on Beneficial Ownership (FATF, Guidance on Beneficial Ownership Recommendation 24, https://www.fatf-gafi.org/en/publications/Fatfrecommendations/R24-public-consultation-oct-2022.html).

[40] FATF, What are FATF Mutual Evaluations?, https://www.fatf-gafi.org/content/dam/fatf-gafi/methodology/Handout-5th-Round-Methodology.pdf.

[41] FATF, Anti-money Laundering and Counter-Terrorist Financing Measures — United States, 7th Enhanced Follow-up Report, https://www.fatf-gafi.org/content/fatf-gafi/en/publications/Mutualevaluations/united-states-fur2024.html.

[42] FinCEN estimates 32.6 million pre-existing reporting companies are required to file by Jan. 1, 2025, and five million new filers, hence 37.6 million. See note 13, at 59584.

[43] Statement by FinCEN Director Andrea Gacki, note 30. The FACT Coalition has estimated “close to [one] million” filers already in a March 4, 2024, press release; See Zorka Milin & Erica Hanichak, District Court Ruling Undermines U.S. Fight Against Dirty Money, FACT Coalition (Mar. 4, 2024), https://thefactcoalition.org/district-court-ruling-undermines-u-s-fight-against-dirty-money.

[44] Presumedly, FinCEN’s new Beneficial Ownership Information Technology System would have been designed to handle the 32.6 million filings expected in 2024 for pre-existing reporting companies and 5 million more new reporting companies expected in 2024 and annually thereafter. If, say, 25 million reporting companies were to delay filing until after Oct. 31, 2024, the system would have to handle over four and one-half times the filing rate for its design, over 416,000 reports every day, including weekends and seasonal holidays, to meet the Jan. 1, 2025, reporting deadline. Filing a beneficial owner report requires answering a series of interactive prompts and uploading an image, the process taking several minutes for the simplest filing.

[45] CTA §6403(d). Linkedin, CTA Tip of the Day #18, https://www.linkedin.com/posts/stephen-liss-b061694_landmark-decision-rules-corporate-transparency-act-unconstitutionalpdf-activity-7170075727663353856-fk7C/; An interesting suggestion by Stephen Liss is that FinCEN could use the CDD Rules to have banks and other financial institutions require non-exempt reporting company customers to file the CTA beneficial owner report as a condition of opening or retaining an account. But query whether legislative action would be required to achieve this result or if banks, already seeking relief from the financial cost of existing CDD Rules, would protest the additional burden. Under FinCEN’s announced phased implementation of access to the CTA database (see 88 Fed. Reg. 88732 (2024) at 88740) it may be quite some time before a bank can verify the filing directly and compare the data to that provided to the bank. FinCEN intends to start access to the database in 2024 with a pilot program for a handful of key Federal agency users, then extend access to Treasury offices and certain Federal agencies engaged in law enforcement and national security activities that already have appropriate security agreements with FinCEN for access to Bank Secrecy Act information, with other law enforcement agencies and foreign government requests to follow later, and only then to financial institutions. But if the CTA database is not populated as expected because of the ruling, its usefulness to law enforcement will be impaired. FinCEN has yet to develop the access request and certification forms required by U.S.C. §5336(c). New FAQs issued by FinCEN indicate that financial institution access will begin in the spring of 2025. See FinCEN, FAQ §O, https://www.fincen.gov/boi-faqs. It is unclear how financial institutions will be able to enforce the revised CDD rule if the database is not accessible.

[46] FinCEN, Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities, 87 Fed. Reg. 77404 (2022); and see Regulations.gov, FINCEN-2021-0005-0505, for the American Bankers Association Feb. 14, 2023, comment letter. FinCEN made some revisions to accommodate those comments when issuing the final access rules, 88 Fed. Reg. 88732 (2023).

[47] Opinion at 45-49.

[48] NDAA Division F, §§6001-6511.

[49] House Congressional Record, Dec. 8, 2020, pp. H6932-6933.

[50] The Currency and Foreign Transactions Reporting Act of 1970, as amended, and other statutes relating to the subject matter of that act, are commonly referred to as the Bank Secrecy Act, codified as 12 U.S.C. §1829b, 12 U.S.C. §§1951-1960, and 31 U.S.C. §§5311-5314, 5316-5336. Estimates of compliance costs to the financial institutions range as high as $25.3 billion with some major financial institutions spending up to $500 million annually on CDD requirements, and with the average bank spending $48 million annually, over $3,000 per customer. Thompson Reuters 2016 Know Your Customer Surveys, May 9, 2016; See also Tookitaki, Understanding CDD in Banking, https://www.tookitaki.com/compliance-hub/customer-due-diligence-cdd-for-banks-and-financial-services; BlueCheck, CDD in Banking Explained, https://www.bluecheck.me/blog/customer-due-diligence-cdd-in-banking-explained; Fenergo, KYC compliance for banks, https://resources.fenergo.com/blogs/kyc-compliance-for-banks-addressing-the-cost.

[51] Rep. McHenry (R-SC) has announced his retirement from the House effective at the end of his current term, as has another FinCEN critic, Rep. Blane Luetkemeyer (R-MO), chair of the National Security, Illicit Finance and International Financial Institutions Subcommittee. In the meantime, McHenry has introduced the Accountability through Confirmation Act of 2023 (H.R. 4036, 118th Cong. 1st Sess.), to require the director of FinCEN to be appointed by the president with the advice and consent of the Senate, and to prohibit FinCEN from allowing a reporting company to file its beneficial ownership report with an indication that it is having difficulty getting reliable beneficial ownership information. On Apr. 15, 2024, Rep. Nunn (R-IA) introduced H.R. 7963,the Small Business Red Tape Relief Act of 2024, to require Treasury to report CTA filings to Congress quarterly, and on Apr. 27, 2024, Rep. Loudermilk (R-GA) introduced H.R. 2963, the FinCEN Accountability Act of 2023, to require Treasury to disclose all controlling documents delegating authority to or providing direction to FinCEN, also limiting the authority of Treasury to make certain exceptions regarding proposed or final rules related to FinCEN to the person performing the duties of the secretary. On Apr. 30, 2024, the House Small Business Committee is holding a hearing titled “Under the Microscope: Examining FinCEN’s Implementation of the Corporate Transparency Act” in relation to small businesses.

[52] AMLA §§6502-6508.

[53] Congress might also prescribe a longer lead-in time before a revised CTA might become effective, especially if FinCEN will have to grapple with the interstate commerce issue. Although it took three years for the current CTA to become effective, that should be compared to the seven years it took for the CDD rules to take effect. But transparency advocates might resist an attempt to simplify the CTA’s core concepts of substantial control and beneficial ownership, as those concepts derive from FATF standards.

[54] American Bar Association, Letter of Concern, https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/2019may6-lettertohfscopposinghr2513substitutebill.pdf.

[55] See note 46.

[56] See GAO, IRS Needs to Complete Modernization Plans and Fully Address Cloud Computing Requirements, https://www.gao.gov/assets/gao-23-104719.pdf.

[57] See n.34.

[58] Known as the 1999 “Gatekeeper Initiative.” Kevin L. Shepherd, The Gatekeeper Initiative and the Risk-Based Approach to Client Due Diligence, ABA Section of Real Property, Trust & Estate Law eReport (Apr. 2013), https://www.americanbar.org/content/dam/aba/publications/rpte_ereport/2013/rpte-ereport-2013-2-april-issue.pdf.

[59] The Task Force was disbanded in Aug. 2021.

[60] American Bar Association Task Force on Gatekeeper Regulation and the Profession, Section of Real Property, Probate and Trust Law, Criminal Justice Section, Section of Litigation, Section of International Law and Practice, Report to the House of Delegates Recommendation, https://www.americanbar.org/content/dam/aba/directories/policy/midyear-2003/2003_my_104.pdf.

[61] See Laurel S. Terry, An Introduction to the Financial Action Task Force and Its 2008 Lawyer Guidance, 2010 J. Prof. Law. 3, App. A (2010).

[62] See FATF, The FATF Recommendations (Nov. 2023), available at https://www.fatf-gafi.org/en/publications/Fatfrecommendations/Fatf-recommendations.html; FATF, FATF IX Special Recommendations On Terrorist Financing (Oct. 2001), available at https://www.fatf-gafi.org/content/dam/fatf-gafi/recommendations/FATF%20Standards%20-%20IX%20Special%20Recommendations%20and%20IN%20rc.pdf.coredownload.pdf. These two sets of recommendations now are commonly referred to as the “40+9 Recommendations.” The specified activities highlighted 1) buying and selling of real estate, 2) managing of client money, securities, or other assets, 3) management of bank, savings, or security accounts, 4) organization of contributions for the creation, operation, or management of companies, and 5) creation, operation, or management of legal persons or arrangements, and buying and selling of business entities, with primary focus on transactional lawyers and lawyers who “touch the money.”

[63] ABA, Frequently Asked Questions About the Gatekeeper Initiative and the Voluntary Good Practices Guidance, https://www.americanbar.org/content/dam/aba/publications/criminaljustice/gatekeeper_faq.pdf.

[64] See note 35.

[65] See note 36.

[66] ABA, Policy Recommendation 300, https://www.americanbar.org/content/dam/aba/directories/policy/annual-2008/2008_am_300.pdf.

[67] FATF, RBA Guidance for Legal Professionals, https://home.treasury.gov/system/files/246/RBA-guidance-legal-pros-102008.pdf; FATF, Guidance for a Risk-Based Approach, available at https://www.fatf-gafi.org/content/dam/fatf-gafi/guidance/Risk-Based-Approach-Legal-Professionals.pdf.coredownload.inline.pdf.

[68] ABA, Policy Recommendation 116, https://www.americanbar.org/content/dam/aba/directories/policy/annual-2010/2010_am_116.pdf.

[69] Regulations.gov, Comment on FR Doc # 2012-05187, https://www.regulations.gov/comment/FINCEN-2012-0001-0027.

[70] ABA, Formal Opinion 463 (May 23, 2013), https://www.americanbar.org/content/dam/aba/administrative/professional_responsibility/formal_opinion_463.authcheckdam.pdf.

[71] ABA, Letter to FinCEN (Oct. 3, 2014), https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/2014oct3-comments.pdf.

[72] ABA, A Lawyer’s Guideto Detecting and Preventing Money Laundering, https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/abaguide-preventing-money-laundering.pdf?logActivity=true.

[73] ABA, FinCEN Final Customer Due Diligence Rule Includes Language to Protect Confidentiality of Law Firm Clients (May 1, 2016), https://www.americanbar.org/advocacy/governmental_legislative_work/publications/governmental_affairs_periodicals/washingtonletter/2016/may-/fincen-final-customer-due-diligence-rule-includes-language-to-pr/.

[74] See note 37. The ABA continued to comment on the legislative proposals. See ABA, Letter to the House Committee on Financial Services opposing the 2017 ITLEAA (May 24, 2016), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/2016may24-gatekeeperregandtheprofession.pdf; ABA, Letter to the House Committee on Financial Services opposing §9 of the Counter Terrorism and Illicit Finance Act (Nov. 27, 2017), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/gatekeeperregandtheprofessiontf-abalettertohfscfinalversionnov272017.pdf; ABA, Letter to the Senate Judiciary Committee re: opposing Title Act §1454 (Feb. 1, 2018), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/1feb2018-abalettertosjcopposings1454.pdf. See also ABA, Letter to Senate Banking Committee re: the Illicit Cash Act (June 19, 2019), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/aba-letter-to-sbc-june19-2019.pdf?logActivity=true; ABA, Letter to the FATF (Aug. 20, 2021), available at https://www.americanbar.org/content/dam/aba/images/government_affairs_office/aba-comment-letter-to-fatf-on-recommendation-24.pdf.

[75] See note 38.

[76] ABA, Gatekeeper Regulations on Attorneys, https://www.americanbar.org/advocacy/governmental_legislative_work/priorities_policy/independence_of_the_legal_profession/bank_secrecy_act/.

[77] OECD, Common Reporting Standard, https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/. Foreign investors realized that the U.S. was not party to the CRS reporting requirements, so that investments in the U.S. using trusts would not be reported to their home countries.

[78] See note 38.

[79] The “applicant” provisions seemed to some as a toned-down version of the “formation agent” provisions in prior versions, but were substantially reduced in FinCEN’s final reporting rules, now applicable only to newly-formed companies and requiring only two persons to be named. See note 8.

[80] ABA, Letter to House Committee on Financial Services re: the 2019 CTA (May 6, 2019), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/2019may6-lettertohfscopposinghr2513substitutebill.pdf; ABA, Letter to Senate Committee on Banking, Housing, and Urban Affairs re: the Illicit Cash Act (June 19, 2019), https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/aba-letter-to-sbc-june19-2019.pdf?logActivity=true.

[81] See Regulations.gov, FINCEN-2021-0005-0382.

[82] AML/CFT requirements include adopting adequate policies, designating a compliance officer, establishing training programs, and compliance testing.

[83] Rep. Maria Elvira Salazar (R-FL), Legislation To Stop Enablers of International Corruption, https://salazar.house.gov/media/press-releases/representatives-salazar-malinowski-cohen-and-wilson-introduce-legislation-stop.

[84] ABA, Letter re: Opposition to ENABLERS Act Amendment to the FY 2023 National Defense Authorization Act (July 5, 2022), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/aba-letter-to-senate-leaders-opposing-enablers-act-amendment-to-ndaa-july-5-2022.pdf.

[85] ABA, Opposition to ENABLERS Act Amendment to the FY 2023 National Defense Authorization Act (H.R. 7900 and S. 4543) (Oct. 5, 2022), available at https://www.americanbar.org/content/dam/aba/administrative/government_affairs_office/aba-letter-to-senate-leaders-opposing-enablers-act-amendment-to-ndaa-october52022.pdf.

[86] Will Fitzgibbon, U.S. Senate Blocks Major Anti-money Laundering Bill, the ENABLERS Act, ICIJ (Dec. 12, 2022), https://www.icij.org/investigations/pandora-papers/us-senate-blocks-major-anti-money-laundering-bill-the-enablers-act/.

[87] Andrew D’Aversa, American Bar Association Revises Model Rule of Professional Conduct to Combat Money Laundering, JDSupra (Aug. 18, 2023), https://www.jdsupra.com/legalnews/american-bar-association-revises-model-1526319/.

[88] The White House, U.S. Strategy on Countering Corruption, https://www.whitehouse.gov/wp-content/uploads/2021/12/United-States-Strategy-on-Countering-Corruption.pdf.

[89] See also FinCEN Notice of Proposed Rulemaking, 89 Fed. Reg. 12108 (2024), seeking to impose AML/CFT requirements on registered investment advisors and exempt reporting advisors.

[90] See note 88, at pp.11 and 23. See also U.S. Dept. of the Treasury, 2024 National Money Laundering Risk Assessment, https://home.treasury.gov/system/files/136/2024-National-Money-Laundering-Risk-Assessment.pdf.

[91] 89 Fed. Reg. 12424 (Feb. 16, 2024).

[92] Including title insurers or title insurance representatives, real estate brokers and agents, closing and escrow agents, appraisers and inspectors, real estate developers, management companies and auction houses, private lenders and money service businesses, and even private equity. While the proposed rules provide for a cascading hierarchy of which such person is to file the required report, and for a filing agreement among them so that attorneys are not necessarily the reporting party, it would seem that the filing party (most likely the title company) would seek the necessary identification information from the attorneys involved. Transparency advocates wanted even more, including covering non-sale transfers, documentation of the source of funds, verification of occupation and income, reporting the seller as well as the buyer, and with special reporting for politically exposed persons. For an insightful comment casting doubt on the utility of the proposed filing agreement, see Regulations.gov, FINCEN-2024-0005-0003.

[93] See Office of Management and Budget, Commercial Real Estate Transaction Reports and Records, https://www.reginfo.gov/public/doeAgendaViewRule?pubId=202310&RIN=1506-AB61.

[94] 86 Fed. Reg. 69589 (2021).

[95] See Regulations.gov, FINCEN-2024-0005-0092.

WarnerJonathan H. (Jason) Warner concentrates his practice on international tax matters. He is a former chair of The Florida Bar Tax Section and was named the section’s, Tax Attorney of the Year, in 2008. Warner was a principal participant in the section’s FIRPTA withholding tax project that resulted in enactment of a new model federal tax withholding system. He is a past chair of the Committee on International Tax of the ABA Section of International Law and Practice, and has authored several comments to Congress and the Treasury on pending federal legislation or regulations. He has been a frequent speaker and writer on international and other tax topics. Warner received his J.D. in 1971 from Columbia University School of Law, where he was managing editor of the Columbia Journal of Transnational Law. Prior to opening his own practice in 1999, he was a partner in the law firms Greenberg, Traurig; Fowler, White (Miami); and Baker & McKenzie. An early adaptor to telecommuting, he now works primarily from the North Carolina mountains.

This column is submitted on behalf of the Tax Section, Shawn Wolf, chair, and Charlotte A. Erdmann, Daniel W. Hudson, and Angie Miller, editors.

Tax