FILE – Treasury Secretary Janet Yellen receives a briefing during a visit to the Financial Crimes Enforcement Network (FinCEN) in Vienna, Virginia, Jan. 8, 2024. The National Small Business Association won a legal challenge to the Financial Crimes Enforcement Act corporate transparency, a law aimed at combating money laundering.
Susan Walsh/AP
The deadline for a new federal requirement affecting small businesses is approaching, but litigation and education efforts have sowed confusion and opened the door to fraudsters, particularly small business owners in Spanish-speaking communities.
Small businesses with 20 or fewer employees are now required to file a beneficial ownership information report with the U.S. Department of the Treasury. The January 1, 2025 deadline is currently voluntary due to ongoing litigation.
The reports began last New Year’s Day, but two lawsuits in Texas and Alabama temporarily suspended enforcement of the 2025 deadline for filing complaints.
Some business advisors have told their clients that they will need to submit the information and have completed some training on the program, but they don’t go any further.
“We shouldn’t tell people what is or isn’t required since that’s not our agenda,” Trevor Leahy, the Oregon Secretary of State’s small business ombudsman, told the Office of Business Assistance. small businesses.
The federal reporting requirement is part of the Business Transparency Act of 2021. The law requires business owners to report their personal information and submit copies of their identification documents online.
The law aims to combat money laundering, but Molly Day, vice president of public affairs for the National Small Business Association, said people who already commit financial crimes might not disclose their personal information themselves .
“I don’t think it’s going to do anything,” she said.
His organization sued the federal government this year, resulting in the suspension of the requirement for the NSBA’s approximately 65,000 members.
A second lawsuit, filed by Texas Top Cop Shop, Inc., led to reports that all affected businesses must become voluntary, for now.
Leahy said he encourages small business owners to stay informed by signing up for FinCEN e-alerts, the Financial Crimes and Enforcement Network website.
Some small business owners received no information about the new reporting requirement, or if they did, Jose Balcazar said, it was likely fraudulent.
Balcazar, a bilingual business counselor at the Small Business Development Center at Central Oregon Community College, said his office has become aware of official-looking letters sent to business owners informing them of reporting requirements and then seeking hundreds of dollars for that owners submit information about their business. in the name of.
The Treasury warns against scams on its website. Filing the Beneficial Ownership Information Report is free and can be done on the FinCEN website.
Balcazar’s team has worked to help business owners learn how to write reports, but with all the delays and confusion, outreach has been difficult.
“Unfortunately there is not much information in the press, especially in Spanish,” Balcazar said.
The FinCEN website provides an FAQ sheet in multiple languages, but all other reporting portals and information are provided in English. The website can be translated into Spanish using Google’s web page translation feature.
Leahy said his office participated in a bilingual education effort in the Portland suburb of Forest Grove to educate Spanish speakers about the new requirement.
In Central Oregon, Balcazar said he proactively reaches out to his customers to let them know.
If the law overcomes legal challenges, penalties for failing to provide the information could be up to $10,000 and two years in prison.
To learn more about beneficial ownership information, users can visit FinCEN.gov/boi. Small business owners who prefer to do business in Spanish can contact the Oregon Secretary of State. Small Business Assistance Office at 1-844-469-5512 or Central Oregon Community College Small Business Development Center at 541-383-7290.