Personal Finance

Treasury may fine small businesses up to $10,000 if they don’t file this report

Published

6 months ago

December 9, 2024

Treasury Secretary Janet Yellen following a tour of the Financial Crimes Enforcement Network (FinCEN) in Vienna, Virginia, on Jan. 8, 2024.

Valerie Plesch/Bloomberg via Getty Images

Small businesses and their owners could face penalties of $10,000 or more if they don’t comply with a new U.S. Treasury Department reporting requirement by year’s end — and evidence suggests many haven’t yet complied.

The Corporate Transparency Act, passed in 2021, created the requirement. The law aims to curb illicit finance by asking many businesses operating in the U.S. to report beneficial ownership information to the Treasury’s Financial Crimes Enforcement Network, also known as FinCEN.

Many businesses have a Jan. 1, 2025 deadline to submit an initial BOI report.

This applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

The Treasury Department did not respond to CNBC’s request for comment on the number of BOI reports that had been filed to date.

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The data helps identify the people who directly or indirectly own or control a company, making it “harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures,” according to FinCEN.

“Corporate anonymity enables money laundering, drug trafficking, terrorism and corruption,” Treasury Secretary Janet Yellen said in a January announcement of the BOI portal launch.

Here’s the kicker: Businesses and owners that don’t file may face civil penalties of up to $591 a day, for each day their violation continues, according to FinCEN. (The sum is adjusted for inflation.) Additionally, they can face up to $10,000 in criminal fines and up to two years in prison.

“To a small business, suddenly you’re staring at a fine that could sink your business,” said Charlie Fitzgerald III, a certified financial planner based in Orlando, Florida, and a founding member of Moisand Fitzgerald Tamayo.

The federal government had received about 9.5 million filings as of Dec. 1, according to statistics FinCEN provided to the office of Rep. French Hill, R-Arkansas, who has called for the repeal the Corporate Transparency Act. Hill’s office shared the data with CNBC.

That figure is about 30% of the estimated total.

FinCEN was receiving a volume of about 1 million new reports per week as of early December, Hill’s office said.

Many businesses may not be aware

Nitat Termmee | Moment | Getty Images

A “beneficial owner” is a person who owns at least 25% of a company’s ownership interests or has “substantial control” of the entity.

Businesses must report information about their beneficial owners, like name, birth date, address and information from an ID such as a driver’s license or passport, in addition to other data.

Companies that existed prior to 2024 must report by Jan. 1, 2025. Those created in 2024 have 90 calendar days to file from their effective date of formation or registration; those created in 2025 or later have 30 days.

Corporate anonymity enables money laundering, drug trafficking, terrorism, and corruption.

Janet Yellen

U.S. Treasury Secretary

There are multiple exceptions to the requirement: For example, those with more than $5 million in gross sales and more than 20 full-time employees may not need to file a report.

Many exempt businesses — like large companies, banks, credit unions, tax-exempt entities and public utilities — already furnish similar data.

Brian Nelson, under secretary for terrorism and financial intelligence for the Treasury Department, said in an interview at the Hudson Institute earlier this year that the agency was “on a full court press” to spread awareness about the BOI registry, which opened Jan. 1, 2024.

But it seems many business owners either aren’t complying with or aware of the requirement, despite outreach efforts.

The scope of national compliance is “bleak,” the S-Corporation Association of America, a business trade group, said in early October.

The “vast majority” of businesses hadn’t yet filed a report, “meaning millions of small business owners and their employees will become de facto felons come that start of 2025,” it said.

Enforcement is up in the air

Bevan Goldswain | E+ | Getty Images

However, the situation isn’t quite that grim, others said.

For one, a federal court in Texas on Dec. 3 temporarily blocked the Treasury Department from enforcing the BOI reporting rules, meaning the agency can’t impose penalties while the court conducts a more thorough review of the rule’s constitutionality.

“Businesses should still be filing their information,” said Erica Hanichak, government affairs director at the Financial Accountability and Corporate Transparency Coalition. “The deadline itself hasn’t changed. It just changes enforcement of the law.”

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The government is expected to appeal, and enforcement “could resume” if the injunction is reversed, wrote attorneys at the law firm Fredrikson.

Additionally, Treasury said it would only impose penalties on a person (or business) who “willfully violates” BOI reporting.

The agency isn’t out for “gotcha enforcement,” Hanichak said.

“FinCEN understands this is a new requirement,” it said in an FAQ. “If you correct a mistake or omission within 90 days of the deadline for the original report, you may avoid being penalized. However, you could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.”

Personal Finance

Student loan borrower in SAVE forbearance says interest growing

Published

2 hours ago

June 9, 2025

Business Finance News

Los Angeles, CA – May 17: Signage and people along Bruin Walk East, on the UCLA Campus in Los Angeles, CA, Wednesday, May 17, 2023.

Jay L. Clendenin | Los Angeles Times | Getty Images

An unexpected $3,000 in interest

Ellie Bruecker

Courtesy: Bruecker Family

Despite the government’s promises, Bruecker’s student debt has grown by around $3,000 during the roughly year-long SAVE reprieve, her loan documents show.

“I saw those numbers and my eyes bugged out of my head,” said Bruecker, 34.

She’s not the only SAVE borrower seeing interest accruing: Other people facing the same issue have taken to social media to try and get answers.

At one point, around 8 million people were enrolled in the SAVE plan, according to the Education Dept.

Bruecker happens to work as the director of research at The Institute for College Access & Success, a nonprofit that does advocacy work in the higher education space. But she wonders how many student loan borrowers will even know that this wasn’t supposed to happen, let alone be able to get it corrected.

“Will they resolve this for everyone, or just those who get them on the phone and are loud about it?” she said.

Advocate: Check your loan history

It’s unclear how widespread the issue is.

A spokesperson for the Education Dept. did not answer CNBC’s questions about the issue some borrowers are facing, but said that those “enrolled in the SAVE Plan remain in a forbearance that is not accruing interest.”

Mohela did not immediately respond to a request for comment.

But Mohela has a notice at the top of its website that reads: “If you recently received an interest notice for your student loan account, please know that this is not a bill, and no action is necessary at this time.”

The notice goes on to say that, “For borrowers on the SAVE administrative forbearance, interest is currently set at 0%. Refer to your loan details in your notice.”

The company does not say that the alerts were sent in error, but they likely were, said higher education expert Mark Kantrowitz.

“MOHELA sent out misleading notices to their borrowers who are in the SAVE repayment plan,” Kantrowitz said.

“Borrowers who are worried about the MOHELA letter should check their loan history to see if the balance has changed,” Kantrowitz added. If their debt has grown since July 2024, “they should contact MOHELA,” he said.

Educator and former U.S. Representative Dr. Jamaal Bowman speaks to hundreds of students from Washington, DC universities protesting U.S. President Donald Trump’s dismantling of and funding cuts to the Department of Education, in Washington, D.C., U.S. April 4, 2025.

Allison Bailey | Reuters

Bruecker said her loan records from both Mohela and the Education Dept. reflect a higher balance after roughly around $3,000 in interest was added to her debt during the forbearance.

“Mohela has been allowing interest to accrue the entire time my loans have been in this SAVE forbearance,” she said.

She tried to contact Mohela to correct the error, but said she was unable to reach a representative despite waiting on the phone for hours.

In recent months, the Trump administration has terminated around half of the Education Department’s staff, including many of the people who helped assist borrowers when they ran into issues like this one. A federal judge has ordered Trump officials to reinstate the terminated employees, but the administration is now asking the Supreme Court to block that order.

“With the level of dysfunction at the Education Department right now, I have a real distrust this is going to get resolved for people,” Bruecker said.

Personal Finance

Job market is ‘trash’ right now, career coach says — here’s why

Published

6 hours ago

June 9, 2025

Business Finance News

Nitat Termmee | Moment | Getty Images

The U.S. job market isn’t looking too hot for recent college graduates and other job seekers, according to economists and labor experts.

“The job market is kind of trash right now,” said Mandi Woodruff-Santos, a career coach and personal finance expert.

“I mean, it’s really difficult,” she added. “It’s really difficult for people who have many years of experience, so it’s going to be difficult for college kids.”

‘Tough summer’ for job seekers

That may seem counterintuitive.

The national unemployment rate in May was relatively low, at 4.2%. The layoff rate has also been historically low, suggesting employers are holding on to their workers.

Yet, hiring has been anemic. The pace of employer hiring in April was the lowest in more than 10 years, since August 2014, excluding the early months of the Covid pandemic.

The rate at which workers are quitting — a barometer of worker confidence about their job prospects — has also plummeted to below pre-pandemic levels, a stark reversal from the “great resignation” in 2021 and 2022.

“It will be a tough summer for anyone looking for full-time work,” Heather Long, chief economist at Navy Federal Credit Union, wrote in an e-mail Friday.

“This is an ‘abundance of caution economy’ where businesses are only filling critical positions and job seekers, especially recent graduates, are struggling to find employment,” she said.

Steady job market erosion ‘cannot continue forever’

While the job market may be limping along by some measures, Long also said a recession doesn’t seem “imminent.”

Businesses added more jobs than expected in May, for example. But those gains have slowed significantly — a worrisome sign, economists said.

Employers appear reluctant to hire in an uncertain economy.

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CEO confidence plummeted in the second quarter of 2025, seeing its largest quarterly decline on record dating to 1976, according to a survey by The Conference Board. Uncertainty around geopolitical instability, trade and tariff policy were the largest business risks, according to Roger Ferguson Jr., the group’s chair emeritus.

The share of CEOs expecting to expand their workforce fell slightly, to 28% in Q2 from 32% in Q1, and the share planning to cut their workforce rose 1 point, to 28%.

“The steady erosion in the US job market cannot continue forever — at some point, there will just not be much left to give,” Cory Stahle, an economist at the Indeed Hiring Lab, wrote in an analysis Friday.

“In a low-hiring, slow-growth environment, employers can only hold onto their existing employees for so long before they too will have to be let go — increasing unemployment even as job opportunities continue to shrink,” Stahle wrote.

Don’t underestimate personal connections

Don’t underestimate the “power of personal connections” to help get noticed in a competitive job market like this one, said Woodruff-Santos, the career coach.

Her No. 1 piece of advice: Make yourself “uncomfortable” in order to network and build professional relationships.

“You need to put yourself in situations where you may not know everybody, you may not know one person, where you may actually need someone to give you a bit of a helping hand, and to feel confident and OK doing that,” Woodruff-Santos said.

If you’re pushed to accept a job you don’t love to make ends meet, make a plan to keep current in the field to which you aspire, she said.

In other words, build the skills that will eventually help you get that job, perhaps by taking a training course, getting a certificate or doing contract work, she said. Also, consider joining a professional organization, putting yourself in the same room as people in your desired field and with whom you can connect, she said.

These steps raise your chances of getting attention from future employers and keeping your skills sharp, Woodruff-Santos said.

She also had some words of encouragement.

“The job market has been trash before,” she said. “It’ll be trash again. This probably won’t be your first trash job market. And you’re going to be OK.”

Personal Finance

What Pell Grant changes in Trump budget, House tax bill mean for students

Published

1 day ago

June 8, 2025

Business Finance News

Carol Yepes | Moment | Getty Images

For many students and their families, federal student aid is key for college access.

And yet, the Trump administration’s budget proposal for fiscal year 2026 calls for significant cuts to higher education funding, including reducing the maximum federal Pell Grant award to $5,710 a year from $7,395, as well as scaling back the federal work-study program. The proposed cuts would help pay for the landmark tax and spending bill Republicans in the U.S. Congress hope to enact.

Roughly 40% of undergraduate students rely on Pell Grants, a type of federal aid available to low-income families who demonstrate financial need on the Free Application for Federal Student Aid. Work study funds, which are earned through part-time jobs, often help cover additional education expenses.

President Donald Trump‘s “skinny” budget request said changes to the Pell Grant program were necessary due to a looming shortfall, but top-ranking Democrats and college advocates say cuts could have been made elsewhere and students will pay the price.

“The money we invest in post-high school education isn’t charity — it helps Americans get good jobs, start businesses, and contribute to our economy,” Sen. Elizabeth Warren, D-Mass., told CNBC. “No kid’s education should be defunded to pay for giant tax giveaways for billionaires.”

Pell Grants are ‘the foundation for financial support’

Nearly 75% of all undergraduates receive some type of financial aid, according to the National Center for Education Statistics.

“Historically the Pell Grant was viewed as the foundation for financial support for low-income students,” said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy and a research fellow of the National Bureau of Economic Research. “It’s the first dollar, regardless of other types of aid you have access to.”

Under Trump’s proposal, the maximum Pell Grant for the 2026-2027 academic year would be at its lowest level in more than a decade.

“The Pell reduction would impact the lowest-income families,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

More than 92% of Pell Grant recipients in 2019-2020 came from families with household incomes below $60,000, according to higher education expert Mark Kantrowitz.

How Pell Grant cuts could affect college students

If the president’s cuts were enacted and then persisted for four years, the average student debt at graduation will be about $6,500 higher among those with a bachelor’s degree who received Pell Grants, according to Kantrowitz’s own calculations.

“If adopted, [the proposed cuts] would require millions of enrolled students to drop out or take on more debt to complete their degrees — likely denying countless prospective low- and moderate-income students the opportunity to go to college altogether,” Sameer Gadkaree, president and CEO of The Institute for College Access & Success, said in a statement.

Already, those grants have not kept up with the rising cost of a four-year degree. Tuition and fees plus room and board for a four-year private college averaged $58,600 in the 2024-25 school year, up from $56,390 a year earlier. At four-year, in-state public colleges, the average was $24,920, up from $24,080, according to the College Board.

The Pell program functions like other entitlement programs, such as Social Security or Medicare, where every eligible student is entitled to receive a Pell award.

However, unlike those other programs, the Pell program does not rely solely on mandatory funding that is set in the federal budget. Rather, it is also dependent on some discretionary funding, which is appropriated by Congress.

The Congressional Budget Office projected a shortfall this year in part because more students now qualify for a Pell Grant due to changes to the financial aid application, and, as a result, more students are enrolling in college.

Cutting the Pell Grant is ‘extreme’

Although there have been other times when the Pell program operated with a deficit, slashing the award amount is an “extreme” measure, according to Kantrowitz.

“Every past shortfall has been followed by Congress providing additional funding,” he said. “Even the current House budget reconciliation bill proposes additional funding to eliminate the shortfall.”

However, the bill also reduces eligibility for the grants by raising the number of credits students need to take per semester to qualify for the aid. There’s a concern those more stringent requirements will harm students who need to work while they’re in school and those who are parents balancing classes and child care.

“These are students that could use it the most,” said the University of Chicago’s Turner.

“Single parents, for example, that have to work to cover the bills won’t be able to take on additional credits,” Mayotte said.

“If their Pell is also reduced, they may have to withdraw from school rather than complete their degree,” Mayotte said.