Though a federal court previously issued a preliminary injunction against the beneficial ownership information (BOI) reporting requirements issued in January, a newly proposed bill in Congress would prohibit enforcement of the rule until the Financial Crimes Enforcement Network (FinCEN) meets specific criteria.
FinCEN on Jan. 1 launched its BOI E-Filing website so that companies may report their information digitally to comply with the Corporate Transparency Act. However, while an online method works well for many companies across the United States, the system alienates the many rural businesses unable to access a reliable broadband connection, according to U.S. Sen. Jerry Moran (R-KS), who on Dec. 3 sponsored the currently unnamed S. 5414.
“Kansans have voiced their concerns regarding the new federal reporting requirements for businesses, particularly in rural areas,” said Sen. Moran on Thursday. “This legislation would help provide additional time, clarity and flexibility for businesses in Kansas to comply with federal standards without facing burdensome and unnecessary penalties.”
If enacted, S. 5414 would prohibit federal funds being used to enforce the BOI reporting requirement until the effective date for all BOI requirements is delayed by a minimum of one year, according to a bill summary provided by the lawmaker.
Additionally, FinCEN would have to first finalize all outstanding BOI rulemakings, and allow rural businesses to file their information via mail, the summary says.
Last month, Sen. Moran also called on FinCEN Director Andrea Gacki to allow rural business owners to submit their beneficial ownership information through the U.S. Postal Service (USPS) due to the lack of broadband connectivity in many rural areas of America.
“Considering the harsh penalties associated with a failure to file, FinCEN would essentially be penalizing Americans for operating their businesses in areas that do not have reliable internet access,” wrote Moran in a Nov. 15 letter sent to Gacki.
“Given the existing burdensome regulatory environment that our economy currently operates under, allowing rural business owners to submit these forms through USPS would help level the playing field for mom-and-pop businesses in our nation’s smallest towns,” he added.
The senator’s latest bill has been referred to the U.S. Senate Banking, Housing, and Urban Affairs Committee for consideration.