DAILY Bites
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Over 230,000 farms are required to comply with filing Beneficial Ownership Information.
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Farms structured as either a c-corporation, s-corporation or limited liability company need to pay attention.
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Failure to file could lead to hefty fines and potential jail time.
DAILY Discussion
The American Farm Bureau Federation is sounding the alarm as the January 1, 2025, deadline for filing Beneficial Ownership Information with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) looms.
According to new analysis from Farm Bureau economists, over 230,000 farms are required to comply with this federal mandate, yet less than 11 percent of eligible businesses nationwide have done so. The Corporate Transparency Act of 2021 introduced this requirement to combat money laundering, affecting many farms structured as c-corporations, s-corporations, or LLCs.
Failure to file could lead to severe penalties, including hefty fines and potential jail time.
“Time is running out for thousands of farmers who may face steep fines and possible jail time for failing to file their businesses with the federal government,” writes the AFBF.
Many farms are structured as either a c-corporation, s-corporation or limited liability company (LLC), which are now required to be registered if they employ fewer than 20 employees or receive under $5 million in cash receipts — which covers the vast majority of farms.
“The use of LLCs is an important tool for many farms to keep personal and business assets separated, but small businesses often lack the staff to track and stay in compliance with changing rules and regulations,” said AFBF President Zippy Duvall. “It’s clear that many farmers aren’t aware of the new filing requirement. Unclear guidance and lack of public outreach are now putting thousands of America’s farmers at risk of violating federal law.”
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.
“The greater farm economy will also be impacted by CTA requirements,” AFBF economists write. “Many feed and supply stores, crop marketers like grain elevators and the greater rural business community are also likely required to file their BOI and subject to penalties if they do not comply. The regulatory burdens and potential enforcement crackdowns could have ripple effects throughout the entire food, fiber and fuel supply chains.”
The AFBF is encouraging farmers to contact an accountant or attorney if they are unsure whether they are required to file their business’s BOI with FinCEN.
