By Scout Nelson
Farmers across the country are facing a critical deadline to comply with new federal regulations or risk steep penalties. By January 1, 2025, thousands of farms must file Beneficial Ownership Information (BOI) with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
This requirement stems from the Corporate Transparency Act of 2021, designed to prevent money laundering by identifying the “beneficial owners” of businesses.
Analysis by the American Farm Bureau Federation (AFBF) reveals that over 230,000 farms are subject to this requirement, yet government data shows fewer than 11% of eligible businesses nationwide have complied.
Many farms are organized as c-corporations, s-corporations, or limited liability companies (LLCs), which are now required to file if they employ fewer than 20 people or generate less than $5 million in annual cash receipts—a category that encompasses most farms.
“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,” said AFBF President Zippy Duvall. “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.”
Non-compliance can result in significant consequences. Penalties include criminal fines up to $10,000, additional civil fines of $591 per day, and even felony charges that could lead to two years of imprisonment.
The filing requirement extends beyond farms to other rural businesses such as feed suppliers, grain elevators, and crop marketers, potentially affecting the broader agricultural economy. Regulatory burdens and enforcement actions may ripple through the food, fiber, and fuel supply chains, adding stress to rural communities.
Farmers unsure about their obligations are urged to consult an accountant or attorney for guidance. Failing to meet the deadline could lead to financial and legal troubles for those who remain unaware or unprepared.
Compliance with this new regulation is essential to avoid penalties and ensure smooth operations for farms and rural businesses alike.
Photo Credit: nebraska-farm-bureau
Categories: Nebraska, Government & Policy