A while back I wrote about federal Beneficial Ownership Information (BOI) registration for small businesses. https://gomixt.com/boi/ I wanted to offer an update after watching the lawsuits and hearing the latest from the AICPA conference in June. The bottom line is that the law requiring registration is still in place. You should find out what this means to your business and do what you need to do. See below for some additional resources.
Note: I am not a tax professional nor a lawyer. This is not professional advice. This is just information from someone who is impacted by this law.
For those who haven’t heard of BOI or FinCEN and what they want from your small business, here’s a quick recap:
- Passed in 2021 and effective in 2024, the Corporate Transparency Act (CTA) requires that all targeted small businesses report their beneficial ownership details to the federal government.
- There are exceptions to these reporting requirements that include non-profits, those with more than 20 employees and more than $5M in revenue, and those who are otherwise already federally regulated, among others.
- The National Small Business United v. Yellen lawsuit found the CTA unconstitutional and has put a temporary stay on BOI reporting for the plaintiffs only. There has been no reported change to the requirement or enforcement.
- Registration is fairly quick at https://fincen.gov/boi and requires the name, address, and ID of beneficial owners.
- Failure to register comes with some pretty hefty penalties, including daily fines and possible jail time.
Beneficial owners, in short, are those with 1) individuals who own or control the entity directly or indirectly, and 2) individuals with significant control or influence over the entity’s policies, operations, or management.
If you think this requirement from the CTA could apply to your business, please reach out to your accountant or lawyer for advice on the best path forward. If you’re sure you need this, you can do it yourself in about 10 minutes at https://fincen.gov/boi
FinCEN Guidance on Beneficial Ownership Information: https://fincen.gov/beneficial-ownership-information-reporting
IRS Guidance on Beneficial Ownership Information: https://www.irs.gov/individuals/international-taxpayers/beneficial-owners
Corporate Transparency Act (CTA) Guidance: https://www.fincen.gov/news/news-releases/fincen-issues-final-rule-regarding-access-beneficial-ownership-information
Regulations Implementing the CTA: https://www.fincen.gov/news/news-releases/fincen-issues-final-rule-regarding-access-beneficial-ownership-information
