The U.S. Bureau of Labor Statistics published its Consumer Price Index report on September 11, 2024, that says Arizona’s mimimum wage effective January 1, 2025 will be $14.70 an hour. The 2024 minimum wage is $14.35 an hour. The 35-cent minimum wage increase is directly tied to the latest CPI report, which showed a 2.5% increase in inflation from August 2023 to August 2024.
A federal law called the Corporate Transparency Act effective January 1, 2024, requires almost all U.S. companies to file a FinCEN Beneficial Owner Information report with the Financial Crimes Enforcement Network of the U.S. Treasury (“FinCEN“) or the company can be fined $500 a day for a late report. Companies formed before 2024 must file no later than December 31, 2024. Companies formed in 2024 must file within 90 days of their formation date.
My son and I own a company called FinCEN Filer, LLC, that files FinCEN BOI reports. To learn more about the Corporate Transparency Act read How to Avoid the $500/Day Fine and articles and blog posts on FinCEN Filer’s website. Watch these FinCEN Filer videos: 1. What Info Must be Reported, 2. Definition of Beneficial Owner, 3. What Beneficial Owner Information is in a FinCEN BOI Report, 4. Alert: Legal Consequences of Filing a False FinCEN Report, and 5. Our FinCEN BOI Report Services.
How to Hire FinCEN Filer to File a FinCEN BOI Report
Go to https://fincenfiler.com/services
Warning: If you are an owner of a U.S. company you need to be aware of the due date of your company’s FinCEN BOI report. Reports are due:
How the CTA Affects Your Entity
Here is a brief summary of the CTA:
Subscribe to Our Free CTA Newsletter
To stay up to date on the CTA, its regulations, and how to file a CTA FinCEN report get a free subscription to our CTA newsletter.
Question: Can my lender call my loan that encumbers my land if I transfer the land to an LLC I own?
Answer: Probably not. The Federal National Mortgage Association, aka Fannie Mae, has something called Servicing Freddie Mac Mortgages Series 8000. Section 8406.4(b) Additional permitted Transfers of Ownership Effective 10/20/2021 states:
“Permitted Transfers of Ownership subject to conditions. In situations where all of the following conditions are met, Freddie Mac will permit a Transfer of Ownership of the Mortgaged Premises:
The managing member/general partner of the LLC/LP is the original Borrower. If there are multiple Borrowers, all of them must be members/partners of the LLC/LP, and at least one of them must be a managing member/general partner. If the transfer results in a permitted change of occupancy type to an investment property, such change must not violate the Security Instrument (e.g., the 12-month occupancy requirement for a Primary Residence), and
The Servicer notifies the original owner or natural person that the Mortgaged Premises transferred to an LLC/LP must be transferred back to the original owner or natural person prior to any subsequent refinance or modification application to meet Freddie Mac’s underwriting requirements
Fannie Mae ruling D1-4.1-02: Allowable Exemptions Due to the Type of Transfer (04/13/2022) says due on sale clauses cannot be enforced if the borrower transfers the encumbered land to a limited liability company. The rule states:
“the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer: . . . A transfer of the property (or, if the borrower is an inter vivos revocable trust, a transfer of a beneficial interest in the trust) to a limited liability company (LLC), provided that
Bottom line is Fannie Mae approves transfers of encumbered land without the lender being able to enforce a due on sale clause.
Question: You setup an LLC for me that is owned by a revocable living trust you created. I gave the bank a copy of the Articles of Organization, the Operating Agreement, the Trust Agreement and the Certification of Trust, but the bank won’t open an account for the LLC unless you send the bank a letter that says that I am the trustee of the trust that is the member of the LLC?
Answer: You are dealing with an idiot banker because he/she wants somebody who is not an owner of the LLC or affiliated with the LLC, i.e., me, to sign a letter that states who owns the trust. Ask the idiot banker if another bank employee can sign the letter because that person has the same connections to the LLC and the trust as I have.
Your Certification of Trust and your Trust Agreement show that you are the trustee, aka the “owner” of the trust. Why doesn’t the banker know that? It’s because he or she is an idiot.
I’ve formed 8,700+ LLCs and only one other time has a bank idiot asked me to sign a letter before opening an account. The other time the idiot banker wanted me to sign a letter as the LLC’s statutory agent stating that the LLC’s address was the address displayed on the Arizona Corporation Commission website. Why wouldn’t the idiot ask the owner of the LLC to sign that letter?
Go to another bank or a different branch. I don’t recommend that LLC owners open accounts with Chase, Wells Fargo or Bank of America.
On January 29, 1972, 50 years ago I married the love of my life. Finding and marrying Carol was the best thing that ever happened to me. I first saw Carol at a Phi Gamma Delta fraternity party at Penn State in the winter of 1967. I was a pledge and she had been invited to the frat party because her sister Ellen was pinned to one of my frat brothers. It wasn’t love at first sight, but I do remember I thought she was the prettiest girl I had ever seen.
We were both freshmen that winter. Carol dated a number of my fraternity brothers over the next two and a half years. At the beginning of my junior year I asked Ellen if she would fix me up with Carol and she did. Unfortunately for some reason I stood Carol up. I was a no show. Ellen was understandably mad and said she would never fix me up with Carol again.
The beginning of our senior year I got the courage to call Carol and ask for a date. Getting dates at PSU in 1966 – 1970, the years we attended PSU, was very hard for guys because there were five guys for every woman. My freshman year I called a girl for a date and she booked me six weeks later because that was her first opening.
Lucky for me Carol agreed to go out with me. We hit it off immediately and dated exclusively our senior year. After graduation I went to USAF Officer Training School at Lackland AFB, Texas, and Carol returned to her home town to take a job teaching in elementary school. We tried long distance dating, but it was hard in the days before the smart phone, facetime, email and texting.
In the fall of 1971 I was just beginning the six month program in which I learned how to fly the F-4 Phantom supersonic fighter-bomber at Luke AFB, Arizona.
F-4Es returning to Korat Royal Thai Air Base, Thailand, from missions over North Vietnam
I called Carol and asked her to marry me. She said yes. We didn’t have time to plan a wedding. On Friday, January 29, 1972, Carol and I were married in the Methodist Church at Central Avenue and Missouri Avenue in central Phoenix. Six people attended – my parents and brother, two of my parents’ friends and my best friend from college who happened to be passing through Phoenix. Unfortunately nobody from Carol’s side of the family was able to attend the wedding.
We drove to San Diego that afternoon for our short honeymoon. I had to be back to work on Monday so we drove back to Phoenix Sunday afternoon. We lived at Oakwood Garden apartments on 40th Street just north of Camelback Road, in Phoenix. I drove to Luke AFB everyday to fly the F-4, attend academic classes and fly the F-4 simulator. The traffic was much lighter back then, but it still took 45 minutes to drive one way.
In May of 1972, four months after we were married the Air Force sent me to the Vietnam war and Korea for 13 months. Carol stayed behind in our apartment and worked at American Express at 32nd Street and Lincoln in Phoenix. Carol lived with me in my one room barracks bedroom at Kunsan Air Base, Korea, for three weeks in 1973. During the 13 months I was overseas we wrote a lot of letters to each other. When I returned to the States we decided to destroy all our letters because we didn’t want our future children to read what we thought was too much “mushy” language. I now regret destroying those letters.
Carol and I have three children and four grandchildren. For the last 21 years Carol and I have worked closely in my law practice. She is the office manager and the bookkeeper. She is one of the reasons I’ve been able to have a very successful law practice.
I love my wife very much and thank God everyday for letting her be the love of my life.
On January 1, 2022, the following new Arizona laws became effective:
Last month we formed 76 Arizona LLCs, the most since we started counting in 2002. The previous monthly high was 62. Thanks to everybody who hired us last month.
I don’t usually insert reviews I get into a blog post, but yesterday I got a very nice review I want to share with you. Here is the review:
If you are ready to start your LLC, this is the office you need to call. The process is so streamlined, the people are so knowledgeable & kind, & they work INCREDIBLY fast. I was absolutely shocked at how quickly things were done & could not be more pleased. The reasonable fees up front are well worth the potential liability avoided in the future. The items completed for my business by this office would have taken days or weeks for me to research & execute myself, & even then I could not be sure they were done properly without an attorney reviewing them. The follow up support is also wonderful & the informational emails the office sends out on a regular basis have been very valuable. If you are on the fence, don’t think twice. Spend a little now for excellent service & LLC setup done properly, save a lot later by avoiding mistakes that can cost dearly in the future. Your business is important, do it right. Cannot recommend enough!
People love my LLC formation services, which is why I have 373 five star reviews on Google, Facebook and Birdeye.
July of 2020 was a record-setting month for our LLC formations. We formed 65 new Arizona LLCs and PLLCs that month. Thanks to all of our new clients. People love our low priced LLC formation services, which is why we have 373 five star reviews on Google, Facebook and Birdeye. See the contents and prices of our three LLC packages. Complete our online questionnaire to hire us to form an LLC or call Arizona LLC attorney Richard Keyt at 480-664-7478.
Memorial Day originated in the nineteenth century as a day to remember the U.S. soldiers who gave their lives in the American Civil War by decorating their graves with flowers. It is the day Americans remember the military men and women who died while serving our country. It is a day when people decorate the graves of our fallen military heroes. Memorial Day this year is May 27, 2024.
From World War I to today, more than 40 million Americans have served in the U.S. military. Over 1,136,000 people were wounded in combat and 660,000 gave their lives for our country.
John Williams’ beautiful song “Hymn to the Fallen” plays as the video visits cemeteries around the world where Americans who made the ultimate sacrifice fighting for freedom are buried. The video also tells how many Americans are buried at each cemetery.
by Five Star General Douglas MacArthur
The motto of the United States Military Academy at West Point is “Duty, Honor, Country.” On May 12, 1962, retired 82-year-old U.S. Army General Douglas MacArthur, holder of the Medal of Honor and the leader of the Army in the Pacific theater during World War II, gave his now famous 34-minute “Duty, Honor, Country” speech without notes to the entire corps of 2,100+ West Point cadets. This speech is my favorite speech of all time on any topic. I re-read it several times a year because: (i) what the General says about military service and sacrifice and Duty, Honor, Country moves and inspires me, and (ii) what he said then is as true now as it has always been throughout the history of the U.S. military. I recommend you read the entire text of the speech and listen to an audio of the General’s speech. (more…)
During 2019 we formed 535 Arizona LLCs and PLLCs, which is a firm record for the most companies formed in one year. Our previous record for forming LLCs was 530 in 2012. Since I started counting in 2002 I have formed 9,300+ LLCs and PLLCs. People love our low prices and LLC services. See the contents of our three LLC packages, the ($497 Bronze, $797 Silver & $1,297 Gold. Our Gold LLC is the confidential LLC for people who do not want their name and address on the Arizona Corporation Commission’s public records.
We also set a firm record in 2019 for non-profit corporation formations of 34. Our previous record for forming non-profit corporations in one year was 32 in 2018.
We now have 1,328 subscribers to our Arizona LLC law blog posts. If you want to subscribe for free, enter your email address in the field in the right side bar under the text that reads:
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Our Youtube channel has 1,190 subscribers and 73 videos. We are always adding new videos so if you want to learn more about Arizona LLCs or wills, trusts and estate planning subscribe to our Youtube channel and click on the bell to get notices when we add a new video.
Cody Keyt, the KEYTLaw office dog, created an Instagram account. Follow his Instrgram account at arizonalawdog. See Cody’s biography web page.
This week a client gave us our 100th five star Google review. We now have 253 five star Google reviews and 373 total five star reviews on Google and Birdeye. Thanks to all who have given us a five star review. 
To crack down on terrorists, drug dealers and human traffickers the House Financial Services Committee in June of 2019 passed the Corporate Transparency Act. The bill would require all limited liability companies and corporations that have less than $5 million of revenue or twenty employees to disclose to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) personal information about the entity’s owners.
Each entity subject to this law must report to FinCEN the social security number, drivers license information, address, birth date and name of all owners of the entity. The penalty for not complying is a $10,000 fine and up to three years in jail.
The Wall St. Journal said “The reality is that the law would hit small businesses with another compliance burden, their confidential information would become less secure, and real criminals are unlikely to be deterred.”
The National Federation of Independent Business (NFIB) said the law is a “threat to more than 5 million small businesses in America.”
Arizona Attorney General Mark Brnovich announced today [March 11, 2019] that his office recently filed suit in the U.S. Supreme Court against the State of California seeking to invalidate California’s extraterritorial tax assessments and seizures, which result from an unconstitutional “doing business” tax against businesses and individuals that don’t actually conduct any business in California.
Every year, California assesses an $800 “doing business” taxes against Arizona businesses that conduct no actual business in California. Instead, their only connection to California is a mere passive, non-managing investment in a California limited liability company. California continues to assess these “doing business” taxes even though both its state courts and tax appeals agency have held that the taxes are illegal under California law.
The lawsuit filed by Arizona alleges that these taxes are plainly unconstitutional under the Due Process and Commerce Clauses of the U.S. Constitution. The Supreme Court has held that passive investment in a company located in another state is not sufficient “minimum contacts” to impose taxation under the Due Process Clause (Shaffer v. Heitner, 433 U.S. 186 (1977)). The Supreme Court has also recognized four requirements for states to impose taxes on out-of-state businesses under the Commerce Clause. California’s “doing business” assessments brazenly violate all four.
The amounts collected by these “doing business” assessments are substantial. Arizona estimates that its citizens pay over $10 million in these unconstitutional taxes to the State of California every year.
These taxes also impact Arizona’s tax collections. Since the “doing business” taxes are deductible expenses, Arizona loses an estimated $484,000 in tax revenue each year due to California’s illegal taxation.
These figures are further compounded since the tax applies to all individuals in other states who invest in California businesses.
Extraterritorial Seizures
Making matters worse, if California’s tax assessments are not paid voluntarily, California frequently further tramples on the sovereignty of other states by issuing orders to interstate banks, demanding that they transfer funds in Arizona-based accounts for back payment. Those seizure orders threaten the banks that, if they do not transfer the funds, California will take the taxes and penalties owed from the banks instead. Not surprisingly, the banks almost uniformly consent to California’s strong-arm tactics.
Exhibit G in the filing provides an example where California demanded that Wells Fargo not only transfer the $800 tax, but also a $200 “demand penalty,” a $432 “late filing penalty,” a $79 “filing enforcement fee,” and $63.40 in interest, for a “Total Tax, Penalties, Interest and Fees” of $1574.40.
The lawsuit alleges that these seizure orders violate both the Due Process Clause (by exercising jurisdiction over out-of-state funds without the requisite “minimum contacts”); and, the Fourth Amendment (by effectuating seizures without a warrant, probable cause, or involvement of any court). Those seizure orders further preclude the banks from filing any court challenge.
Arizona’s suit seeks to end California’s unconstitutional tax encroachments.
If you are a non-U.S. citizen who is the sole member/owner of a U.S. limited liability company treated by the IRS as a disregarded entity (a “DE”) you must file an IRS form 5472 with the IRS on or before the due date of the Form 5472 or become liable to pay the IRS a penalty of $25,000. If you must file Form 5472 and fail to file it before the due date and then fail to file the Form 5472 within 90 days after the due date you will become liable for an additional $25,000 penalty.
The U.S. DE LLC must file Form 5472 if it had a reportable transaction with a foreign or domestic related party. To learn what are reportable transactions, who are related parties and more about this topic read my article called “LLCs 100% Owned by Foreign Persons Must File IRS Form 5472 or be Liable for $25,000 Penalty.”
[bctt tweet=”Learn about the $25,000 penalty when a foreign person who owns a U.S. LLC that is a disregarded entity fails to file IRS form 5472.” username=”azattorney”]
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I formed my first Arizona LLC the day Arizona’s LLC law became effective in October of 1992. I did not start counting the number of LLCs I formed until 2002 so I don’t know how many LLCs I formed the ten years after Arizona adopted LLCs. I’ve formed 9,300+ Arizona LLCs.
The reason I’ve formed so many Arizona LLCs is because my LLC services are second to none. Nobody offers as many LLC services as I provide for the low prices of $897 (Silver LLC) and $1,397 (Gold LLC that includes a revocable living trust). Read some of the 373 five star Google & Facebook reviews our clients have given me.
The Arizona Corporation Commission announced today that its franken-monster, i.e., its online e-document filing and document retention system is almost alive! That’s what the email I got today from the Arizona Corporation Commission tells me. Here’s the text of the message
We are pleased to inform you that we are going live with our upgraded E-filing/database system! Some details to note:
- E-filing will NOT be available from Wednesday, May 16 at 5:00 pm until Monday, May 21 at 8:00 am.
- The website is otherwise available for searching and viewing entity records up until Friday, May 18 at noon.
- We will accept paper documents at our physical locations in Phoenix and Tucson up until Friday, May 18 at noon.
- The new system/site will be available on Monday, May 21, at 8:00 am.
- During implementation, penalties for late-filed corporation annual reports will be waived, and corporations will not be administratively dissolved for failing to file the annual report.
If you previously responded to a request to provide your email address (for some statutory agents and MOD account holders), beginning May 21 you can register in the new system using that email address. As a reminder, MOD accounts will be handled solely online.
We will send a separate email explaining how the statutory agent process works in the new system.
Online filing is not mandatory, but is strongly recommended. When the new system is up and running (as of May 21), we will continue to accept documents by mail, in person, by fax, and through the email address of [email protected]. The EMAIL document intake will be discontinued approximately 2-3 weeks after the go-live date. We will change the bounce-back auto message on that email to give a date certain for termination of that service.
Bottom line: A new Arizona Corporation Commission electronic world is about to begin. I’m sure there will be growing pains, but from the demo I saw last November it looks like the new digital / online filing and record-keeping system is going to be great. I anticipate that we will soon be filing all LLC and corporation documents with the Arizona Corporation Commission using its online e-filing system.
Watch the Arizona Corporation Commission’s short explanation video.
Last week we got 5 star online review number 100. Shortly thereafter we got number 101. These 101 reviews include 71 5 star Google reviews and 16 5 star Facebook reviews. The other reviews are on Birdeye and Avvo. Thanks to all who gave us the nice reviews. We appreciate it very much and will continue to provide excellent legal services.