On January 1, 2024, the Corporate Transparency Act (“CTA”) came into effect, changing our perception of a “corporation” as we know it. In particular, the CTA targets small businesses with no employees, and aims to “combat money laundering, tax fraud, and other illicit activities”. (Thomas Reuters). However, the CTA’s regulatory powers remain broad, requiring all reporting companies to submit a beneficial owner report. Id. A reporting company includes all entities “that are formed or registered to do business in the United States.” (BakerHostetler). The report will include the beneficial owner’s “name, date of birth, address, and unique identifier number from a recognized issuing jurisdiction and a photo of that document.” (Thomas Reuters). A beneficial owner is classified as one that either: (1) maintains significant control over the reported company, or (2) has a 25% equity ownership interest in the reporting company. Id. Under this criterion, over 27 million small businesses fall within the regulatory scope of the CTA. Id. This does not include the 23 types of entities that are exempt from the CTA because they are already regulated under different federal and state laws. (Nicholas McMichen, DeWitt; Sandra Feldman, Wolters Kluwer). This article analyzes the objectives of the CTA, specifically how it arose, along with the implications it has for the effected parties.
Read MoreOn October 1, 2023, Robert F. Kennedy, Jr. (“RFK”) announced a new economic plan as part of his presidential campaign, featuring a guaranteed government-backed mortgage at 3%. (Carlson, The Hill). RFK’s government-backed mortgage plan (the “Plan”) is intended to incentivize working-class Americans to buy more homes. (https://www.kennedy24.com/help-buying-homes-video). The Plan achieves this goal by providing low interest rates, which would be appealing to working-class citizens. Id. The overall issue that RFK is aiming to address with his Plan is to stop the current takeover of the housing market by investment companies and the consequent increasing housing prices. Id. This post discusses the potential conflict that RFK’s Plan could have with existing government-backed mortgages provided by government agencies, the Federal Trade Commission’s (“FTC”) mortgage regulations, and possible economic consequences on the housing and mortgage markets.
Read MoreOver the past decade, the Internal Revenue Service’s (“IRS”) budget has been cut, its workforce has been reduced, and audit rates for high-income taxpayers have nosedived. (Center on Budget and Policy Priorities). This has resulted in a large and consistently increasing tax gap (the difference between taxes paid and taxes owed). Id. After years of being underfunded, the IRS was allocated billions of dollars in federal funding via the Inflation Reduction Act of 2022 (“IRA”). (Alan Rappeport, The New York Times). This article reviews the impact of the IRA’s historic funding provided to the IRS, how the IRS is implementing the funding across its operations, and opposition that has arisen in response to the positive impact efforts, specifically surrounding the implementation of artificial intelligence (“AI”) as an enforcement mechanism.
Read MoreWith a market cap valued at over a staggering $1 trillion, cryptocurrency’s (or “crypto(s)”) exponential market growth has led to a hotly debated, new-found regulatory force by the U.S. Securities and Exchange Commission (“SEC”). (Forbes). The SEC’s eager regulatory control over crypto has fueled legal battles, with the most recent development involving investors advocating for bitcoin exchange-traded funds (“ETF(s)”). (Aislinn Keely, Law360). The Commission has historically resisted investor’s efforts. (Hannah Lang, et al., Reuters). However, a recent District of Columbia Court of Appeals decision, dubbed a victory for plaintiff and digital asset management company Grayscale Investments (“Grayscale”), has proven hopeful to investors. Id. This post explores the Grayscale decision, the SEC’s and Grayscale’s respective arguments, and both the narrow and broad implications of the decision against the backdrop of the SEC’s position on cryptocurrency.
Read MoreThe Federal Aviation Administration (“FAA”) recently proposed a rule change that, if passed, would likely put airlines like JSX out of business. (Regulations.GOV; Alison Sider, The Wall Street Journal). JSX is a Dallas-based airline founded in 2016, which operates regularly-scheduled flights using a fleet of 30-seat aircraft that provides a premium flying experience to the general public. (JSX). JSX does this by operating “semi-private” flights out of private terminals that provide flyers with easy access parking, no lines, no-hassle security, and a flexible pet policy. (JSX; Gary Leff, View From The Wing). Additionally, because JSX operates from private terminals, it can fly to destinations that other airlines cannot, such as Taos, New Mexico. Id.
Read MoreThe largest mass tort litigation in U.S. history has come to an end. On August 29, 2023, 3M, a company specializing in the manufacturing and distribution of industrial, safety, and consumer products, reached a $6 billion settlement, resolving hundreds of thousands of lawsuits filed by U.S. military service members (the “Plaintiffs”). The Plaintiffs claimed that they suffered hearing loss from the use of 3M’s earplugs. (Brendan Pierson, Reuters). The settlement followed 3M's failed attempt to limit its liability through a controversial legal maneuver known as the “Texas Two-Step.” Id. This article explores 3M’s legal battle, specifically its unsuccessful Texas Two-Step, and the potential impact from the failed maneuver on future corporate liability.
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