Dec 9, 2024

Farm Bureau commends court-ordered pause in federal filing requirements

The American Farm Bureau Federation (AFBF) is commending a federal court’s halting of a federal form business filing requirement that could have jeopardized growers through unknowingly facing fines and imprisonment.

A federal court in the Eastern District of Texas issued a nationwide injunction that halted enforcement of the Beneficial Ownership Information filing requirements under the Corporate Transparency Act (CTA). The requirements essentially mandates the filing of private business ownership information with the federal government, according to a Dec. 4 news release from the Washington, D.C.-based AFBF.

Jan. 1 was the deadline for thousands of farmers who may have faced steep fines and possible jail time for failing to file their businesses with the federal government, according to the release.

Analysis in an AFBF MarketIntel by economists showed more than 230,000 farms were required to file, but government data indicated less than 11% of all eligible businesses nationwide have filed, according to the release.

“Farmers and ranchers across the country have faced great uncertainty since the passage of the Corporate Transparency Act in early 2021 and as the Beneficial Ownership Information regulations have been written,” Zippy Duvall, AFBF president, said in the release. “Questions are swirling about who is required to file and who will have access to the confidential data being collected.

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, according to the release.

Businesses that failed to file, or didn’t update records when needed, could have faced 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, according to the release.

“Farm Bureau has long fought against the mandated disclosure of farmers’ private business information to the federal government in a number of different scenarios,” Duvall said in the release. “For a second time this year, a federal court has ruled the CTA oversteps the Constitution on that front. We appreciate the temporary reprieve provided by the injunction and hope Congress can take a cue from the courts in the coming weeks to provide a more permanent resolution to this problematic policy.”