Tag Archives: BOI

Education, Tips

BOI Reporting Is Back — Most Filings Now Due January 13, 2025

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My feelings regarding how FinCEN has handled Beneficial Ownership information (BOI) under the Corporate Transparency Act (CTA) are best left unexpressed.

With all the insanity about Beneficial Ownership Information (BOI) reporting these past few weeks — first the nationwide injunction preventing FinCEN from enforcing the Corporate Transparency Act (CTA)… then the House passing a Continuing Resolution (CR) that would give us all a year-long delay while the various court challenges made their way through the system… then the Senate passing a version of the CR without addressing the issue… and then, yesterday a stay on the injunction by the Fifth Circuit — meaning that everything is back in place and the BOI is once again law of the land — how much more confusion could there possibly be?

I’ve been putting off finalizing my definitive article on the topic for months, despite having interviewed five different filing companies back in January and February, as most sources of information suggested that the BOI was likely to be delayed a year — that’s certainly what AICPA, NATP, and our other membership organizations have been lobbying for in Congress. And with the increased confusion surrounding this year-end injunction prohibiting its enforcement, even FinCEN itself said that though they would appeal, for the time being, BOI filing would be voluntary. And now it’s the holidays and everything has been upended. So — I’m going to push off a longer article on what the heck BOI is and why we have to file it and the myriad reasons I feel it’s a terrible law (though probably not unconstitutional — just terrible lawmaking) until after the New Year, and this just covers “what you need to know NOW”.

In a tiny bit of good news for what’s left of our holiday season, at least they’ve given us 12 days of BOI extension in place of 12 days of Christmas or 8 days of Hanukkah.

What are the current deadlines?

An update from Melanie Lauridsen at AICPA:

‼️ Financial Crimes Enforcement Network, US Treasury issues small extension/delay for BOI reporting. ‼️
Specifically:
* Companies created or registered prior to January 1, 2024 have until January 13, 2025 to file.
* Companies created or registered on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file.
* Companies created or registered on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file.
* Companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
* Companies that are created or registered on or after January 1, 2025 have 30 days to file.

And here’s a handy Journal of Accountancy article with a few more details.

What are my options?

Well, I’m not a lawyer, so I can’t advise you, but I can say that you do seem to have a couple of choices — file it yourself or seek help.

  1. File the BOI on your own as a DIY — in which case I recommend you use my colleague Hannah Smolinski‘s handy do-it-yourself YouTube guide, here. This is free and you file directly with FinCEN. The negatives are that it’s a bit fussy and your data is not saved for the next time you file or update your info. The pros: FREE and DIRECT.
  2. File the BOI with the help of a third party. There are a zillion out there, many of whom are just going through the motions without considering the potentially special needs of your situation — such as condo associations, cooperatives, and other group filers, or other companies whose beneficial owners are not listed on the Secretary of State documents filed when you became organized or incorporated. Worse even, many companies and attorneys are charging an arm and a leg for this reporting — and getting it, from unsuspecting businesses. I’ve interviewed quite a few companies offering this service, and my favorite ended up being File Forms. I like the ease of use of their user-interface, the fact that they have guidance to walk you through the process, and that they let you save your info for the next time you have to file or update your report. (Note: while this is a referral link, know that I chose them well before they offered it to me; I had a great experience with their sister organization during the ERC era, and they were my objective personal selection for my own BOI filing after interviewing five different companies.)

What happens if I choose not to file?

Penalties are steep for willful non-compliance. I would not take this approach… though if you’re really opposed to it, or already on winter vacation, or busy with year-end tax planning or other seasonal work, you could try waiting until the first week of the new year in case this gets delayed one more time. I wouldn’t personally give you a hard time about that approach. Just don’t forget!

Why are some people so opposed to this?

For now, I’m going to skip answering this question in full — it’ll have to wait until my more comprehensive article on the topic. The short version is that it’s a huge amount of red tape for small business owners that already have way too many barriers to success; FinCEN did a lousy job promoting it and educating business owners; the definition of a beneficial owner is vague; most of this information is already on file at the Secretary of State; it’s too easy to miss filing an update unknowingly; the penalties for non-filing are way too high; and the people who are doing the money laundering are going to have an easy time getting around this anyway.

Is it unconstitutional?

I have no idea. Some folks think it is. Some don’t. That’s why there’s so much court activity on this, adding to the confusion.

What’s my next step?

Decide whether to file DIY or with a third-party. If DIY, go to Hannah‘s step-by-step instructions. If with a third-party, decide whether to use your usual attorney or a company like File Forms. If your situation is at all complex or you don’t understand the instructions — seek professional assistance!

And have a happy holiday season.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

Education, Tips

Urge Congress To Delay FinCEN “BOI” Reporting Burden for Small Businesses

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The past few months, we’ve been keeping an eye on a new reporting requirement that will create a massive burden on small business owners. Starting in 2024, millions of small businesses will be required — as part of an anti-money-laundering initiative — to file a “beneficial ownership information” (BOI) report with the Financial Crimes Enforcement Network (FinCEN, a branch of the U.S. Department of Treasury). Failure to comply can cause the company and those responsible steep fines — $500 per day up to $10,000 — and even possible jail time. 

And yet, the vast majority of small business owners know nothing about this new rule, and just a few months before year-end, guidance is still forthcoming. Too many questions remain regarding how it will affect the targeted small business owners — those who run a business that had to file a document with the Secretary of State to create the company (C-Corps, S-Corps, and LLCs, most commonly).

The super-surprising part here is that exemptions are only designed for larger companies — not small businesses. Corporations or LLCs with more than 20 full-time employees, more than $5 million in gross receipts, and an operating presence at a physical office in the USA — as well as those already regulated by the federal or state government — qualify for a “large operating company” exemption.

The National Federation of Independent Businesses has prepared a handy fact sheet available to the public that includes a great summary of the information that owners will need to provide:

The NFIB Government Relations Director Jeff Brabant comments, “anyone who has a 25% or greater stake in the company or senior officer will have to register a copy of their driver’s license and business information. This is a daunting task and probably the biggest regulation that no one is talking about right now.”

“NFIB is pushing for a full repeal of this legislation,” said Brabant. “We feel it’s unnecessary; however, administratively there is a chance that FinCEN delays it, and there’s also a chance that Congress delays it for one year. The statute allowed for up to two years for reporting for companies once this is passed on January 1; however, FinCEN chose one year. So FinCEN can choose to delay it another year and that’s something we hope they do.”

In today’s AICPA Town Hall, they issued a call to action, asking small business owners — CPA firms especially — to contact their representatives by September 15th and request a delay of the implementation. They’ve provided a Word Doc template with background and speaking points for your email or phone call, and have encouraged members to share it widely.

From the AICPA:

Two bills have been introduced in U.S. Congress to delay this rule – H.R. 4035 and S. 2623, both titled the Protecting Small Business Information Act of 2023. These identical bills introduced in the U.S. House by Representative Patrick McHenry and introduced in the U.S. Senate by Senator Mike Rounds would delay the start date of the rule providing additional time for small businesses to learn about and better understand their new reporting requirements. We want to obtain as many cosponsors in both the U.S. House and U.S. Senate as possible, to keep these bills moving. We are asking you to reach out to your House of Representatives Member to ask them to cosponsor H.R. 4035, and to also reach out to your two United States Senators to ask them to cosponsor S. 2623.

· You can find your House of Representatives Member at https://www.house.gov/
· You can find your two U.S. Senators at: https://www.senate.gov/senators/senators-contact.htm

In addition to the Word Doc and Town Hall presentation, the AICPA has created a Beneficial Ownership Information resource page, and an FAQ for CPA firm practitioners — many of whom are struggling with how to help their small business clients implement yet one more set of compliance requirements.

Wolters Kluwer has also created a free set of resources for those who may be affected by the new legislation, which you can access here, including an on-demand webinar where you can learn more.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. Ths allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.