The AICPA has asked the Financial Crimes Enforcement Network (FinCEN) to consider the cost, burden and redundancy of a proposal to change reporting requirements on beneficial ownership information.
FinCEN, a bureau within the U.S. Department of the Treasury, collects information on financial transactions to prevent money laundering, terrorist financing, human trafficking and other crimes.
Given that the proposed new reporting requirements do not include the 866 CPA firms registered with the PCAOB, the more than 50,000 state-licensed CPA firms should also be exempt, the AICPA asserts in a May 5 letter to the FinCEN acting director. State boards of accountancy provide “robust oversight,” the letter states.
“Indeed, state boards of accountancy often seek ownership-related information from CPA firms, such as requiring information about owners in connection with annual license renewals or when there are changes in ownership,” the letter states. “Notably, FinCEN’s 2016 Q&A document discussing the customer due diligence rule expressly excludes ‘entities that are subject to federal or state regulations and for which information about their beneficial ownership and management is available from the federal or state agencies.’ ”
The proposal would disproportionately burden small CPA firms – about 80% of the total, with 30,000 sole practitioners, the AICPA letter says.
Additionally, the AICPA comment letter:
- Seeks clarification that affiliates, parents and subsidiaries of PCAOB-registered firms would be exempt from the beneficial reporting requirements, “given that in some cases multiple companies can be layered on top of one another in complex ownership structures.”
- Recommends that FinCEN use the AICPA Privacy Management Framework to safeguard reported data.
- Encourages FinCEN to establish a Small Business Beneficial Ownership Advisory Group to keep stakeholders engaged in proposed changes and updates to the reporting process.