The AICPA is requesting that all licensed or registered CPA firms be exempted from forthcoming rules that require beneficial ownership information to be reported by small businesses to the Financial Crimes Enforcement Network (FinCEN).
In a comment letter to FinCEN, the AICPA says FinCEN should provide CPA firms with a blanket exemption to the requirement because CPA firms licensed or certified by state boards of accountancy already provide ownership information to the states.
FinCEN is creating rules to comply with the Corporate Transparency Act, which is designed to create a beneficial ownership registry in hopes of making it more difficult for criminals to exploit opaque legal structures for purposes such as money laundering, terrorism financing, human trafficking, and drug trafficking.
Many larger CPA firms will not be required to comply with the proposed rules, whose exempt entities include:
- Accounting firms registered with the PCAOB and their subsidiaries; and
- Entities that employ more than 20 full-time employees and earn more than $5 million in gross annual receipts.
The AICPA is seeking the blanket exemption for CPA firms so that smaller CPA firms already sharing ownership information at the state level will not also be required to report this information to FinCEN. The AICPA letter asked FinCEN to carefully consider the burden and cost imposed by the new reporting requirements, including the extent to which the requirements may be duplicative for CPA firms.
“There is robust oversight at the state levels that occurs as a result of this licensing requirement,” the letter states. “Although the specific provisions that govern the manner in which a state may exercise its oversight authority vary, there is a substantial framework that is used for state oversight of CPA firms.”
The AICPA comment letter also:
- Seeks clarification that affiliates of PCAOB-registered firms would be exempt from the beneficial reporting requirements;
- Recommends that FinCEN use the AICPA Privacy Management Framework as a basis for safeguarding reported data; and
- Encourages FinCEN to establish a Small Business Beneficial Ownership Advisory Group to keep stakeholders engaged in proposed changes and updates to the reporting process.
— Ken Tysiac ([email protected]) is the JofA’s editorial director.