Many companies are required to report information to FinCEN about the individuals who ultimately own or control them. FinCEN began accepting reports on January 1, 2024. The information below has been summarized for informational purposes.
Background
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The Corporate Transparency Act of 2020 was passed in 2021 and authorizes FinCEN (Financial Crimes Enforcement Network – Department of Treasury) to administer the collection of beneficial ownership information.
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Beneficial ownership information (BOI) refers to identifying information about individuals who own or control a company. This can be direct or indirect.
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Effective January 1, 2024
When is initial reporting required?
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For companies in existence as of January 1, 2024, initial reporting is required by January 1, 2025.
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For companies created after January 1, 2024, and before January 1, 2025, initial reporting is due within 90 days.
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For companies created on January 1, 2025, or later, initial reporting is due within 30 days.
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Updated / Corrected reports are due within 30 days of the change or error is discovered.
Reporting Companies
Domestic and foreign reporting companies that are created or registered by filing
documents with the secretary of state (SOS) or similar office are subject to the BOI
reporting requirements. This includes a corporation, an LLC, or any other entity type.
Types of reporting companies:
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Domestic reporting company – companies formed and registered in the United States by filing a document with a Secretary of State or similar office
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Foreign reporting company – foreign companies REGISTERED in the United States by filing a document with a Secretary of State or similar office
Exemptions most applicable to motorcoach companies and other small businesses:
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Large operating company
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Entity employs more than 20 full-time employees (generally an average of at least 30 hours of service per week)
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More than 20 full-time employees of the entity are employed in the United States
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The entity has an operating presence at a physical office within the United States. Operating presence at a physical office within the United States means that an entity regularly conducts its business at a physical location in the United States that the entity owns or leases and that is physically distinct from the place of business of any other unaffiliated entity
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The entity filed a federal income tax or information return in the United States for the previous year demonstrating more than $5,000,000 in gross receipts or sales
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The entity reported this greater-than-$5,000,000 amount as gross receipts or sales (net of returns and allowances) on the entity’s Form 1120, consolidated Form 1120, Form 1120-S,Form 1065, or other applicable IRS form
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When gross receipts or sales from sources outside the United States, as determined under federal income tax principles, are excluded from the entity’s amount of gross receipts or sales, the amount remains greater than $5,000,000
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Inactive entities
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was in existence on or before January 1, 2020
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is not engaged in active business
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is not owned by a foreign person, whether directly or indirectly, wholly or partially
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has had no ownership changes in the prior 12 months
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has had no transactions greater than $1,000 in the prior 12 months
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does not hold any assets
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Whose information is reportable?
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Any individual who directly / indirectly owns or controls at least 25% of the reporting company’s ownership interests
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Any individual who directly or indirectly exercises substantial control over the reporting company. Examples of substantial control include:
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Make important decisions about the reporting company’s business, finances, or structure
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Senior officers such as President, CFO, etc.
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Exceptions to beneficial owner
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Minor child (reported by parent/legal guardian)
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Inheritor / Creditor
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Accountants / Lawyers (unless qualifies as beneficial owner or company applicant)
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Employees (unless qualifies as beneficial owner or company applicant)
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Company applicant
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individual who directly files the document that creates or registers the reporting company
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individual primarily responsible for directing or controlling the filing
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only needs to be provided for the company applicant for companies created or registered after 2023
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What Information Must Be Reported
BOI must be reported for the reporting company’s beneficial owners and
certain company applicants.
The following information is required for individuals:
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Individual’s full legal name
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Date of birth
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Street address
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Unique ID number (Image must be provided)
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Nonexpired U.S. passport
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State driver’s license
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The following information is required for each reporting company:
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Company’s legal name
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DBA
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Street address
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State in which company was formed
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Tax identification number
When to File
Initial Report
For existing reporting companies created or registered before 2024, the initial report is
due January 1, 2025.
For reporting companies created or registered after January 1, 2024, and before
January 1, 2025, the initial report is due 90 days after the entity’s creation or
registration.
For reporting companies created or registered after January 1, 2025, the initial report is
due 30 days after the entity’s creation or registration.
Updated Report
An updated report must be filed when there is a change to previously reported
information about the reporting company, its beneficial owners, or the company
applicant(s). The updated report is due within 30 days of the change. If a reporting
company files an information report and later qualifies for one of the filing exemptions,
an updated report should be filed to report the change in exemption status.
Corrected Report
Corrected reports are required when any information previously reported is discovered
to be inaccurate. The corrected report is due within 30 days after the reporting company
becomes aware or has reason to know of the error.
How to File
Reporting companies must file their BOI reports electronically using the BOI e-filing
portal (https://boiefiling.fincen.gov/)
Two ways to submit reports:
• Fill out a web-based version of the BOI report and submit it online (https://boiefiling.fincen.gov/fileboir)
• Upload a completed PDF version of the BOI report
• Cannot be faxed or mailed to FinCEN
Penalties for Not Filing
There are civil and criminal penalties for noncompliance or providing false information.
This applies to reporting companies, beneficial owners, senior officers, and company
applicants.
The fine for willfully failing to complete an initial or updated report or for willfully
providing false or fraudulent information to a reporting company is $500 per day, up to
$10,000 and imprisonment for up to two years. The fine for knowingly disclosing or
using BOI without authorization is $500 per day, up to $250,000 and imprisonment for
up to five years.
A safe harbor to avoid penalties is available if a corrected report is filed no later than 90
days after the report with inaccurate information is submitted.
For more detailed information and FAQ, visit www.fincen.gov/boi
Let us at BUSBooks guide you in obtaining tax benefits that are available to your company right now!
Written by Tracy Fickett, CPA and Peter Shelbo, Consultant
BUSBooks is a unique CPA accounting firm dedicated to the motorcoach industry.