NDFB - North Dakota Farm Bureau
12/26/2024 | News release | Distributed by Public on 12/26/2024 09:11
Last-minute court ruling puts farmers in legal crosshairs
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December 26, 2024
Topic: Issues
A last-minute court of appeals ruling could put tens of thousands of farmers in legal crosshairs for failing to register their businesses with the federal government. Farmers who operate corporations and limited liability companies are once again required to file Beneficial Ownership Information with the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) or face stiff fines or jail time.
A federal district court ruled earlier in December to halt the requirement, but the United States Court of Appeals for the Fifth Circuit lifted the injunction, meaning a Jan. 1, 2025 deadline is back in effect. Analysis from AFBF economists shows more than 230,000 farms are required to file, but as of October, less than 11% of all eligible businesses nationwide had done so.
"Farm Bureau is very disappointed in the court of appeals decision to reinstate the Jan. 1 filing deadline," said AFBF President Zippy Duvall. "It's clear that many farmers aren't aware of the filing requirement because of a lack of guidance and the government's poor public outreach.
"Farmers were given a reprieve from the filing deadline, but ... just two days before the holidays, when many families take a much-needed break from work responsibilities, the courts reinstated the requirement. Unfortunately, thousands of farmers may unknowingly miss the deadline, putting their businesses at risk. We urge the government to grant an extension so more family businesses can comply with the rule."
Businesses that fail to file, or do not update records when needed, could face criminal fines up to $10,000 and additional civil penalties of up to $591 per day. Failure to file could also lead to felony charges and up to two years in prison.
Farmers are encouraged to contact an accountant or attorney if they are unsure whether they are required to file their business's BOI with FinCEN.
Read a Market Intel on the Beneficial Ownership Information requirement here.
Update: The Department of the Treasury recognizes reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, they have extended the reporting deadline as follows:
• Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
• Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
• Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
• Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
• Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.) - namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024) - are not currently required to report their beneficial ownership information to FinCEN at this time.