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Recent Scams disguised by new Corporate Transparency Act

Each year, new laws are passed, and new acts are introduced. On January 1st, 2024, the newest version of the Corporate Transparency Act (CTA) went into effect. Most individuals were not familiar with the CTA, which primarily affects small business owners. Since being passed by Congress, awareness has increased nationally, and the CTA has been on the minds of many business owners. However, the CTA is not the only thing that small business owners should be concerned about.

For anyone unfamiliar with the CTA, I have previously written in-depth about its impact and who it affects. That can be found here for anyone interested in learning more. Put simply, the CTA requires small businesses to submit beneficial ownership information to the United Sates Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The CTA has caused many business owners to worry about compliance issues. Unfortunately, opportunistic individuals are now attempting to capitalize on the fear and anxiety felt by small business owners. Scams are popping up at an alarming rate to exploit individuals’ lack of familiarity with the CTA.

This revelation may cause even more questions for business owners. One of the most obvious questions is, how do you know it’s a scam? Thankfully, shared components and inconsistencies have been identified, making many of the scams much easier to spot. Most of the scams come in the form of an email or a letter. They frequently include the title or phrase “Important Compliance Notice.” This tactic is used to create a sense of urgency. It is common for the scams to claim money is owed in the form of fees or penalties. Nonexistent agencies are often used to add credibility. “United States Regulations” and “Corporate Transparency Act Division” are among the fake names that have been used. Correspondences usually contain a link or QR code. These should never be clicked or scanned. Finally, there is one very important rule to remember if you receive correspondence pertaining to the Corporate Transparency Act. The Financial Crimes Enforcement Network has never indicated that it sends letters out requesting information. In fact, FinCEN doesn’t send out unsolicited requests at all. If an individual receives a request, it is best to report a suspected scam to the Better Business Bureau’s scam tracker to prevent others from being misled.

The Corporate Transparency Act and the scams surrounding it may leave small business owners feeling intimidated. Fortunately, there are resources out there to help navigate the CTA. Attorneys are commonly used to ensure a business’ compliance with the CTA and other legal requirements. Small business owners have a lot on their hands. When it comes to a business’ compliance, it is best to have a licensed attorney to provide professional and informed guidance. Thankfully, the experienced attorneys at Strause Law Group can assist you with maintaining compliance. Contact our office today for a consultation.