The American Farm Bureau Federation issued a warning in October that thousands of U.S. farmers could incur steep fines or even face jail time for failing to file their businesses with the federal government by Jan. 1, 2025.
That date is the deadline to file Beneficial Ownership Information (BOI) with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), AFBF said in a mid-October announcement.
“New analysis in a Market Intel by American Farm Bureau Federation economists shows more than 230,000 farms are required to file, but government data indicates less than 11 percent of all eligible businesses nationwide have done so.
“The Corporate Transparency Act of 2021 required businesses to register any “beneficial owner” of a company in an effort to combat money laundering. 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.”
AFBF President Zippy Duvall said, “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. 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.”
The AFBF went on to say that 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.”
AFBF economists wrote, “The greater farm economy will also be impacted by CTA requirements. 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.”
AFBF encourages farmers to “contact an accountant or attorney if they are unsure whether they are required to file their business’s BOI with FinCEN.” You can read more at Market Intel
