January 11, 2024
New Reporting Requirements – Corporate Transparency Act
It’s all over the interwebs. In fact, there are a number of influencers and others creating unnecessary fear mongering related to this. Let’s break down the new reporting requirements and get to the truth of the matter.
The One Question You Need To Answer First To Determine If You Need To Keep Reading:
Do you have an active LLC, Corporation, Partnership or S Corporation that has filed with a Secretary of State office? If the answer is YES, READ ON– This is for you & your business!
If the answer is NO, you are a sole proprietor and do not have to file. (Phew!)
New regulations and compliance activities imposed upon you as a business owner is just another nod to the fact that being an entrepreneur takes Fortitude because government compliance is a huge part of it! Who knew the American Dream has so much paperwork!? While compliance and filing for the Corporate Transparency Act is not an emergency, it’s going to have to get done sometime in 2024.
First, A Popular Question 🐘: This is a government thing, so it’s included with my tax preparation or other services I’ve already paid for, right?
No. This has nothing to do with income taxes and is a compliance activity imposed by legislation in a completely different system from all other systems. It is not part of any existing or future services you already work with us on, it’s all new, and not related to anything else we do.
The great news is that for most of you, this is something you can do yourself for FREE.
For a typical small business with 1-2 owners, It should take less than 30 minutes and is super easy & straightforward. There is NO FEE associated with filing your BOI report with FinCEN. Any fee you pay to a third party is simply a convenience fee for their time and liability in filing your forms for you.
An Overview of What This is & What it Means to You:
The Corporate Transparency Act went into effect January 1, 2024, and requires “reporting companies” in the US to disclose information regarding the entities beneficial owners. This information goes to the Treasury Department’s Financial Crimes Enforcement Network (‘FinCEN”) under their BOI E-Filing System, Beneficial Ownership Information (“BOI”).
As described by the FinCEN website in vague government talk: The Corporate Transparency Act, enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information about the individuals who ultimately own or control them.
In plainer terms, The Corporate Transparency Act was passed and serves the purpose of making it harder for people to engage in illegal financial transactions. It requires corporations and LLCs -domestic and foreign- that were created by filing a document with a secretary of state, to make a beneficial owner information report through FinCEN. This report will be accessible by federal, state, local, tribal and certain foreign officials for certain authorized activities related to national security and law enforcement.
Probably the most alarming part of this is the penalties for non-compliance.
Don’t dismiss this! The monetary and criminal penalties are steep! What we’ve found is that any person who provides false information or fails to comply with reporting requirements is liable for civil penalties of no more than US$500 for each day that the violation continues. Violators are ALSO subject to criminal penalties of imprisonment of up to two years and fines of up to US$10,000.
What businesses will need to file? (Does My Business Need To File?)
Basically, ALL entities that have filed for an LLC, Corporate or other structure with a Secretary of State. For Fortitude Tax & Accounting’s client base this means:
- S Corporations
There are some exceptions listed HERE on the FinCEN website, but our client base does not include anyone who is exempt, to our knowledge. If you’re here reading this and have a business, it is likely you need to file for your business.
If your entity was in existence before January 1, 2024, you have ALL of 2024 to complete your initial filing.
Who can file a BOI Report?
As the business owner, you can do the filing yourself. I’ve already done it for Fortitude Tax & Accounting and found it pretty easy and straight forward. I honestly believe it will be for you too!
Here is what we found on the FAQ at the FinCEN website:
“Is a reporting company required to use an attorney or a certified public accountant (CPA) to submit beneficial ownership information to FinCEN?
No. FinCEN expects that many, if not most, reporting companies will be able to submit their beneficial ownership information to FinCEN on their own using the guidance FinCEN has issued. Reporting companies that need help meeting their reporting obligations can consult with professional service providers such as lawyers or accountants.”
Who is Considered a Beneficial Owner?
You are a beneficial owner of a company if, you have substantial control over the company OR you own or control at least 25% of the company’s ownership interests.
What information will be reported?
For the company:
- Company’s full legal name and any and all DBAs
- Company’s current address
- Company’s jurisdiction of formation
- TIN or EIN
For each beneficial owner and company applicant:
- Full legal name
- Date of birth
- Current address
- Unique ID number and issuing jurisdiction from
- Image of one of the following non-expired documents
- US passport
- State driver’s license
- ID document issues by a state, local government, or tribe
What if I Have Multiple Businesses?
If you have multiple businesses, you will have multiple filings. Each and every required business needs to file a BOI report.
When Does the Report Need to be Filed By?
For businesses that were created prior to January 1st, 2024, the initial report must be filed by January 1st, 2025. For businesses that were created after January 1st, 2024 and during 2024, the initial report must be filed within 90 calendar days after receiving notice of the company’s creation. After January 1st, 2025, this deadline will change to 30 calendar days from actual or public notice.
What if Previously Reported Information Changes?
You will have 30 calendar days to report any change to the required information about your company or it’s beneficial owners.
Not Sure You Want To Take This On Yourself?
We get it, for many just the idea of ANY government reporting makes you break out in a cold sweat. We’re here to offer a solution!
Fortitude Tax & Accounting has partnered with CorpNet for BOI filings. Due to the amount of sensitive information you need to gather and report, we wanted to select a reputable referral solution.
Please use THIS DEDICATED LINK to have CorpNet help you with your BOI filings. If you run into any troubles, we have a dedicated account manger who we will refer you to that can help you resolve them without having to go through their call center. Their fee is $99 for each entity filing.
We may offer BOI filing services through Fortitude Tax & Accounting later in 2024, but with a new tax time that is already here, we will not be able to consider offering this until after July 1, 2024.
We’ve Added Links To Everything You’ll Need Here!