AFSA, along with other trade groups, has called for a delay in the compliance deadline of the Corporate Transparency Act (CTA) for existing entities. The request highlights uncertainties in reporting requirements and ongoing legal challenges, which are causing difficulties for small businesses. The proposed delay would offer relief to these businesses, allow federal regulators to continue their educational efforts, and provide time for legal challenges to proceed through the courts.

The CTA requires companies to disclose detailed beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). It imposes complex reporting requirements on covered entities and their "beneficial owners," potentially risking sensitive personal information. FinCEN estimates that over 32 million entities will be affected by this law this year alone, with an additional 6 million each subsequent year as new businesses are formed.

As of December 1, 2024, FinCEN has received less than 30 percent of the required filings, indicating a significant gap in understanding compliance obligations under the CTA. This confusion is compounded by numerous legal challenges across the country at various stages of the legal process. A nationwide injunction against the CTA was recently appealed and will be heard by the Fifth Circuit. Additionally, an Alabama court ruling that deemed the CTA unconstitutional is pending appeal in the Eleventh Circuit.

Small businesses face uncertainty as they currently have no obligation to file; however, a single court ruling could change this situation abruptly, leaving them with limited time to comply with what is described as a burdensome statute. A one-year delay is suggested to address these issues effectively.