Author: Jim Dawson

Corporate Transparency Act Beneficial Ownership Reporting

Starting January 1, 2024, a significant number of businesses will be required to comply with the Corporate Transparency Act (“CTA” or “the Act”). The Financial Crimes Enforcement Network (“FinCEN”) estimates that in the first year, approximately 32.6 million businesses will need to comply with the Act and report information related to the business owners, officers, and controlling persons.


Enacted as part of the 2021 National Defense Authorization Act and amending the Bank Secrecy Act, CTA (31 U.S.C. 5336), the CTA is intended to close a perceived information gap related to money laundering and other illicit acts. Specifically, CTA establishes “a database of beneficial ownership information (“BOI”) that will be highly useful in combatting illicit finance and the abuse of shell and front companies by criminals, corrupt officials, and other bad actors” and aids efforts “to protect U.S. national security and safeguard the U.S. financial system from such illicit use.” Although passed in 2020, reporting under CTA was initially delayed. A “Final Rule” was issued in September 2022, making compliance with the Act mandatory for reporting companies as of January 1, 2024.

The definition of a “reporting company” under the Act is complex and may include many small businesses, middle-market businesses, and sole practitioners. There are several categories of exemptions, and most exemptions are for entities that are already subject to substantial federal or state regulation.

In general, reporting companies created before or registered to do business as of December 31, 2023, have until January 1, 2025, to file an initial BOI report with FinCEN. Reporting companies created or registered to do business on or after January 1, 2024, have ninety (90) days from the date of their registration to file an initial BOI report. Reporting companies created or registered on or after January 1, 2025, have thirty (30) days from the date of their registration to file an initial BOI report. After filing an initial BOI report, reporting companies have thirty (30) days to file updated reports detailing statutorily required changes about the reporting company and/or its beneficial owners.

Failure to comply with CTA or missing filing deadlines can result in criminal (fines and/or imprisonment) or civil (monetary) penalties. There is a $500 per day penalty, up to $10,000, and imprisonment of up to two years for failure to timely file initial or updated reports. Additionally, any person who, without authorization, knowingly discloses or uses BOI is liable for $500 per day, up to $250,000, and up to five years of imprisonment.

GTF Recommendation:

It is important for anyone who created or registered a reporting company both on or before December 31, 2023 and on or after January 1, 2024, to seek advice from legal counsel to ascertain both their reporting requirements and to complete the reporting promptly.

GTF works with several attorneys throughout the country who can assist you with CTA. We are glad to provide a list of attorneys for you to choose from.

 Please contact James W. Dawson at (305) 510-0050 if you have any questions. 

Currently Active International Tax Campaigns

The IRS’ List of Currently Active International Tax Campaigns

On April 21st, the Large Business & International (LB&I) published a list of its active tax campaigns to enhance the selection of returns for audit, more ardently identify risk issues associated with noncompliance and assist the IRS in deploying limited resources.

The IRS’ actions on these campaigns generally focus on one or more undertakings, including revising forms and instructions, providing additional guidance, and communicating with taxpayers, practitioners, and software companies. Lastly, the IRS regularly issues Soft Letters to taxpayers. A Soft Letter is essentially a reminder to the taxpayer that something about their prior-year tax return was incorrect or incomplete.
The following is a list of “Active International Tax Campaigns” that both taxpayers and their advisors should be aware of:

Cross-Border Activities:

• Foreign Tax Credit (IRC Sec. 901)
• Financial Service Entities Engaged in a U.S. Trade or Business
• Foreign Base Company Sales Income – Manufacturing Branch Rules
• Form 1120-F Delinquent Returns
• Form 1102-F Non-Filer and Protective Return U.S. Business Activity
• Treatment of Deferred Foreign Income Upon Transition to

Participation Exemption System (IRC Sec. 965)

Treaty and Transfer Pricing:

• Captive Services Provider

Withholding and International Individual Compliance:

• Expatriation of Individuals
• FATCA Filing Accuracy
• Financial Service Entities Engaged in a U.S. Trade or Business
• FIRPTA Reporting Compliance for Nonresident Aliens (NRAs)
• Foreign Earned Income Exclusion
• Forms 1042/1042-S Compliance
• Form 1120-F Chapters 3 and 4 Withholding
• Individuals Employed by Foreign Governments & International


• Individual Foreign Tax Credit Phase II
• IRC Sec. 965 for Individuals
• Loose filed Forms 5471
• Nonresident Alien Individual Tax Credits
• Nonresident Alien Rental Income from U.S. Real Property
• Nonresident Alien Schedule A and Other Deductions
• Nonresident Alien Tax Treaty Exemptions
• Offshore Private Banking
• Offshore Service Providers
• Post Offshore Voluntary Disclosure Program Compliance
• Puerto Rico Act 22, Individual Investors Act
• Swiss Bank Program Campaign
• U.S. Territories – Erroneous Refundable Credits
• U.S. Territories Self-Employment Tax
• Verification of Form 1042-S Credit Claimed on Form 1040-NR
• Virtual Currency

Observation –Taxpayers can resolve the issues identified above by understanding the potential tax issues, adhering to the relevant tax laws, and accurately reporting transactions. I recommend reviewing this list with your tax advisor and taking the appropriate action.

Until next time,

James Dawson, CPA

A “Nudge” for UK Individuals Selling on Online Marketplaces to Pay Taxes

The Covid pandemic and subsequent cost of living crisis in the UK has seen a significant increase in individuals supplementing their income by selling items online. Some have built successful micro-businesses by buying and selling goods through online platforms.

HM Revenue and Customs (HMRC) is aware of this activity and has recently ramped up a campaign to collect taxes it believes have not been paid from individuals selling goods on online marketplaces such as eBay, Etsy, and Facebook Marketplace. HMRC is thought to have collected sales data from popular online marketplaces to support issuing a “nudge letter.”
The nudge letters come with individual case reference numbers and detailed information on sales activity. They ask individuals to respond within 30 days summarizing their tax position and make a voluntary disclosure of their undeclared income within 90 days.
The letters state that HMRC knows it has “information that shows you’ve earned money (income) from Online Marketplace sales” and that it “shows you have not told us (HMRC) about some or all of this income”. They request individuals to complete a “certificate of tax position” with the option to bring tax affairs up to date, that they have correctly declared all income, or that they have not declared their income. Individuals are given 30 days to respond with their certificate.

The letters seem to suggest that HMRC has accessed sales data from these online platforms, and while it is not clear which third party has provided this information to HMRC, these platforms often include detailed sales history of its sellers in the public domain. The letters have been specifically sent out to individuals in which HMRC holds information that it can use to open an investigation if individuals do not respond.
Anyone can sell goods up to the value of £1,000 a year without having to pay tax. However, when a UK individual has reached that £1,000 a year threshold HMRC wants to collect tax on the activity. They have access to technology that allows for the tracking of unpaid taxes. In addition, if an individual has set up a business, HMRC will expect all compliance and tax obligations to be timely met.

Observation –Technology has enhanced HMRC’s ability to collect sales data and pursue individuals who have not disclosed and paid taxes on online marketing platform activities. Taking a proactive approach by contacting a UK tax advisor to advise on the best approach for addressing any unreported income or taxes due can avoid much consternation and financial penalties.

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