FinCEN Releases Proposed Rule to Implement Beneficial Owner Reporting Requirements, Includes Several Recommendations SWACCA Made This Past Spring to Expand Exemptions to Cover More SWACCA Affiliates and Members
This morning, the Financial Crimes Enforcement Network (FinCEN) published a proposed rule to implement a requirement in Section 6403 of the Corporate Transparency Act that a reporting company submit to FinCEN a report containing beneficial owner information on every individual with a 25% or greater interest in or who exercises “substantial control” over a corporation, LLC, and various types of partnerships. This proposed rule follows a related advance notice of proposed rulemaking (ANPRM) that FinCEN published on April 5, 2021, on which SWACCA submitted comments on May 5, 2021.
In its comments, SWACCA recommended that in interpreting an exemption from these reporting requirements for businesses with more than 20 full time employees, over $5 million in gross receipts, and a U.S. presence, FinCEN define “full-time employee” based on the definitions in the Affordable Care Act (ACA) and related regulations so that construction contractors and other employers with seasonal variations in their workforce could still qualify for the exemption from the reporting requirements. We are pleased to report that FinCEN agreed with our comments and is proposing to use the existing ACA definition of full-time employee.
In addition, the proposed rule reflects SWACCA’s suggestion in its comments on the ANPRM this spring that FinCEN exempt all 501(c) non-profit organizations, including entities exempt under section 501(c)(6), from the reporting requirements. This is the provision of the tax code under which most SWACCA affiliates are organized as business associations.
The proposed rule is available in the Federal Register here. Comments are due February 7, 2022.
© 2023 Signatory Wall and Ceiling Contractors Alliance (SWACCA). All rights reserved.