If you own any entity—such as an LLC, LP, Corporation, etc.—the Beneficial Ownership Information (BOI) requirement almost certainly applies to you!
As of February 25, 2025, this requirement is in effect, with an updated due date of March 21, 2025, for most entities. Penalties for willfully not complying with the BOI reporting requirement can result in criminal and civil penalties of $606 per day and up to $10,000 with up to two years of jail time. For more information about the CTA, visit www.aicpa-cima.com/boi.
Please remember that this is a legal FinCen requirement, separate from your income tax return and Secretary of State filings.
Make sure you have either filed your report or are actively monitoring the ongoing changes. It is your responsibility to ensure compliance. We strongly recommend consulting with your business attorney to confirm whether they have filed this on your behalf. If they have not, you can file on your own if you feel comfortable doing so or reach out to us if you need support.
For additional BOI information and to file, please visit: https://fincen.gov/boi
Starting Jan. 1, 2024, a significant number of businesses are required to comply with the Corporate Transparency Act (CTA). The CTA was enacted into law as part of the National Defense Act for Fiscal Year 2021. The CTA requires the disclosure of the beneficial ownership information (BOI) of certain entities from people who own or control a company.
It is anticipated that 32.6 million businesses will be required to comply with this reporting requirement. The intent of the BOI reporting requirement is to help U.S. law enforcement combat money laundering, the financing of terrorism and other illicit activity.
The CTA is not a part of the tax code. Instead, it is a part of the Bank Secrecy Act, a set of federal laws that require record-keeping and report filing on certain types of financial transactions. Under the CTA, BOI reports will not be filed with the IRS, but with the Financial Crimes Enforcement Network (FinCEN), another agency of the Department of Treasury.
A series of legal actions challenging the constitutionality of the CTA and its BOI reporting requirement has been ongoing. Please contact our office for the latest updates. In the meantime, the following sections describe general information about the BOI requirement as set forth in the CTA.
Entities organized both in the U.S. and outside the U.S. may be subject to the CTA’s reporting requirements. Domestic companies required to report include corporations, limited liability companies (LLCs) or any similar entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe.
Domestic entities that are not created by the filing of a document with a secretary of state or similar office are not required to report under the CTA.
Foreign companies required to report under the CTA include corporations, LLCs or any similar entity that is formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.
There are 23 categories of exemptions. Included in the exemptions list are publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities and certain inactive entities, among others. Please note these are not blanket exemptions and many of these entities are already heavily regulated by the government and thus already disclose their BOI to a government authority.
In addition, certain “large operating entities” are exempt from filing. To qualify for this exemption, the company must:
Any individual who, directly or indirectly, either:
An individual has substantial control of a reporting company if they direct, determine or exercise substantial influence over important decisions of the reporting company. This includes any senior officers of the reporting company, regardless of formal title or if they have no ownership interest in the reporting company.
The detailed CTA regulations define the terms “substantial control” and “ownership interest” further.
The CTA provides for different filing timeframes depending on when an entity is registered/formed or if there is a change to the beneficial owner’s information.
FinCEN extended the filing deadlines for initial, updated and corrected BOI reports to March 21, 2025, following the lifting of a nationwide injunction granted in the Samantha Smith and Robert Means v. U.S. Department of the Treasury, No. 6:24-CV-336 (E.D. Texas 1/7/25) case. Companies with previously assigned deadlines later than March 21, 2025, can adhere to their originally set deadline.
Companies must report the following information: full name of the reporting company, any trade name or doing business as (DBA) name, business address, state or Tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).
Additionally, information on the beneficial owners of the entity and for newly created entities, the company applicants of the entity is required. This information includes — name, birthdate, address, and unique identifying number and issuing jurisdiction from an acceptable identification document (e.g., a driver’s license or passport) and an image of such document.
Penalties for willfully not complying with the BOI reporting requirement can result in criminal and civil penalties of $606 per day and up to $10,000 with up to two years of jail time. For more information about the CTA, visit:
Please contact our office at 719-596-6110 to discuss your business situation.