Radiology practices ‘strongly’ urged to seek counsel over Corporate Transparency Act

Radiology advocates are “strongly” urging practices to seek counsel about the forthcoming legal requirements under the Corporate Transparency Act. 

Enacted in 2020 as part of the Federal Anti-Money Laundering Act, regulators were slated to begin enforcing penalties under the CTA on Jan. 1. The law mandates that millions of small- and medium-sized businesses must publicly report details about their ownership or face fines. 

However, multiple lawsuits have challenged the constitutionality of the act and its implementation, the American College of Radiology reported Thursday. A federal trial court has imposed a nationwide injunction on enforcing the CTA, but the feds have appealed. 

In the meantime, radiology practices may opt to voluntarily comply or wait until the case is sorted in court. 

“ACR strongly recommends practices covered by the act consult with a qualified healthcare attorney in their jurisdiction,” the society said in a Feb. 13 update to members. “The college continues to closely monitor this evolving matter and will provide updates.”

The Corporate Transparency Act requires all companies doing business in the U.S. to share details about their ownership. Its aim is to address shell companies that take part in money laundering or the trafficking of humans and drugs, ACR noted. The act primarily applies to privately held entities such as LLCs and corporations. However, there are exemptions for publicly traded companies, government entities and nonprofits, law firm Macias Gini & O'Connell LLP notes. Companies with complex ownership structures—such as startups, family businesses or private equity-backed organizations—“may face challenges reporting beneficial owners.” 

Such owners are defined as those who exercise “substantial control” of a company or have at least 25% equity. To comply, corporations must report the owner’s name, address, date of birth and percentage of their decision-making control. The CTA also exempts entities with 20 or more employees, which have logged over $5 million in gross receipts or sales in the previous year, and maintain a physical presence in the U.S. 

“If larger radiology practices meet each of these conditions, they could qualify for this exemption,” ACR said. 

Those who fail to comply may face civil fines of $591 per day, along with criminal penalties of two years in prison and a $10,000 fine, consulting firm Healthcare Administrative Partners reported. Most radiology practices are unlikely to fit the exemption criteria. 

“Given the uncertainty surrounding this filing requirement, practices will have to decide how to proceed,” HAP said, adding that the Financial Crimes Enforcement Network website has useful information to help practices determine whether they need to file. 

Members of Congress also recently proposed a bipartisan bill called the Protect Small Businesses from Excessive Paperwork Act. The legislation would extend the filing deadline to Jan. 1, 2026, while the Treasury Department educates businesses about the new requirements. A recent survey found that 80% of organizations surveyed were unaware of the requirements and compliance costs. 

The bill passed in the House on Feb. 11 and now awaits consideration in the U.S. Senate. 

“Bureaucrats in D.C. sit in their ivory towers, demanding businesses comply with onerous red tape, without considering the burden it puts on businesses,” Rep. Zach Nunn, R-Iowa, said in a statement shared Feb. 10. “By passing this legislation, we’re taking a step forward to roll back unnecessary regulations and simplify requirements for job creators while still adhering to the law.”