Beneficial Ownership Information (BOI) Reporting Requirments

As part of the Anti-Money Laundering Act of 2020 and the Corporate Transparency Act (CTA), the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) was authorized to collect Beneficial Ownership Information (BOI) and establish Beneficial Ownership Information reporting requirements for certain corporations, limited liability companies, and similar entities created in or registered to do business in the U.S.

These Beneficial Ownership Information reporting requirements went into effect on January 1, 2024. Siepert & Co., LLP is available to assist you with complying with these reporting obligations.

Who Must File a BOI Report?

You may be required to file a BOI report if your business is a corporation, you are an owner of a limited liability company (including single member LLCs), or you are an owner of an entity registered with a U.S. State (or Indian Tribe).

Most domestic and foreign corporations, LLCs, and other business entities with fewer than 20 employees in the U.S. and less than $5 million in gross receipts or sales will be required to file a report.

FinCEN has provided a list of 23 exemptions that apply, which includes publicly traded companies, tax-exempt not-for-profits, and certain large operating companies. Information on exemptions is available at FinCEN FAQs.

What Information Must Be Reported Under BOI Requirements?

Entities are required to report the following entity-related information:

• Legal name of the reporting entity, as well as any trade or “doing business as” names
• Business address
• State or tribal jurisdiction of formation
• IRS taxpayer identification number

Entities must also disclose details about the beneficial owners of the entity, such as name, birthdate, address, and an image of a document with a unique identifying number (i.e., a nonexpired U.S. passport or state driver’s license).

A beneficial owner owns at least 25% of a company OR has “substantial control” over it, meaning a senior officer, important decision-maker, or someone who can appoint and remove officers.

BOI Reporting Deadlines: When Must Companies File?

Initial Filing Deadlines

If your business was registered prior to January 1, 2024, you have until January 1, 2025 to file a report.

If your business was registered on or after January 1, 2024 and before January 1, 2025, you must file a report within 90 calendar days of receiving confirmation of your corporation’s incorporation or organization of your LLC or partnership.

If your business registers on or after January 1, 2025, you must file a report within 30 calendar days of receiving confirmation of your corporation’s incorporation or organization of your LLC or partnership.

When Are Updated BOI Reports Required?

There is no annual reporting requirement for Beneficial Ownership Information, and no report is required to be filed when a business terminates.

However, if there is any change to information submitted on the Beneficial Ownership Information report, an updated report must be submitted within 30 days of the change. This includes changes in:

• who qualifies as a beneficial owner
• name and/or address changes for the business
• name and/or address changes for any of the beneficial owners

Penalties for Failure to Comply with BOI Reporting Requirements

The willful failure to report complete or updated Beneficial Ownership Information to FinCEN, or the willful provision of or attempt to provide false or fraudulent Beneficial Ownership Information, may result in civil or criminal penalties.

Penalties include:

• Civil penalties of up to $591 for each day that the violation continues
• Criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000
• Senior officers of an entity that fails to file a required report may be held accountable for that failure

FinCEN BOI Reporting Scams and Fraud Alerts

FinCEN has learned of fraudulent attempts to solicit information from individuals and entities who may be subject to the reporting requirements under the Corporate Transparency Act. These fraudulent scams may include:

• Correspondence requesting payment. There is NO fee to file BOI directly with FinCEN. FinCEN does not send correspondence requesting payment to file BOI. Do not send money in response to any mailing that claims to be from FinCEN or another government agency.
• Correspondence that asks the recipient to click on a URL or scan a QR code. Those emails or letters are fraudulent. Do not click suspicious links or attachments or scan any QR codes in unsolicited communications.
• Correspondence referencing a “Form 4022” or an “Important Compliance Notice.” This correspondence is fraudulent. FinCEN does not have a Form 4022. Do not send BOI to anyone by completing these forms.
• Correspondence referencing a “US Business Regulations Dept.” This is fraudulent; there is no government entity by this name.

Legal Challenges and Legislative Updates on BOI Reporting

The CTA was ruled unconstitutional by the U.S. District Court for the Northern District of Alabama in March. However, the ruling only applies to the plaintiffs in the case National Small Business Association (NSBA) United vs. Yellen. The federal government has appealed the ruling. Cases challenging the constitutionality of the CTA have also been filed in Maine and Michigan federal district courts.

On 8/2/2024, U.S. Rep. Zach Nunn (R-IA) introduced the Protect Small Businesses from Excessive Paperwork Act (H.R. 9278), which would delay the CTA’s reporting requirements by one year. The bill is backed by Reps. French Hill (R-AR), Sharice Davids (D-KS), and Yadira Caraveo (D-CO). Similar legislation is on hold in the Senate.

Due to the pending legislation and lawsuits, it is recommended that businesses in existence prior to January 1, 2024, whose filing isn’t due until December 31, 2024, wait to file their BOI report with FinCEN until late November/December when perhaps we will know the final outcome.

Any businesses formed in 2024 should still file within 90 days of formation to make sure they do not incur possible late filing penalties.

How Siepert & Co., LLP Can Help with BOI Reporting

If you would like assistance complying with Beneficial Ownership Information reporting requirements or filing your BOI report with FinCEN, please email us at no later than November 15, 2024.

As this does not fall under our standard audit, tax, or accounting engagement letters, a separate engagement letter will be required for this service.

Siepert & Co., LLP is available to help you understand your obligations, prepare required documentation, and ensure timely filing under the Corporate Transparency Act.