FinCEN BOI Reporting – What to know before 01/01/2024!
Report your LLC ownership or get up to a $10,000 file!? Read below for the FinCEN BOI spark notes from our Tampa Accountant.
FinCEN BOI Reporting, effective 01/01/2024, now wants most domestic entities to report their ownership or face $10,000 in fines and possible jail time. Below our Tampa Accountant breaks down the who, what, when, where, and why of the new BOI report.
What is a BOI Report? BOI stands for Beneficial Ownership Information Reporting. It's exactly what it sounds like. A report that you submit to FinCEN that lists all owners and/or decision-makers in your entity. This is part of the Corporate Transparency Act.
Why this is happening? There are 45 million LLCs in the US right now. The government is trying to track down criminals who hide behind shell companies and ghost entities to crack down on fraudulent transactions and other illegal activities (i.e., money laundering, human trafficking, etc.).
#1 - First things first, who does the FinCEN BOI requirement apply to and who are the exceptions?
• REQUIRED: If you own 25% or more of an LLC, you must report your ownership to FinCEN
o Domestic Single Member LLC’s
o Domestic S-Corporations
o Domestic C-Corporations
o Domestic Partnerships
o And any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
o Foreign LLCs or Corporations that are formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.
• REQUIRED: If you exercise substantial control over the entity but have no ownership (i.e., manager, director, officer, CEO, CFO, decision maker, etc.), you are also required to report your information.
• EXCEPTIONS: There are 23 types of entities that are exempt. Most of the list includes publicly traded companies and nonprofit organizations.
o 1 Securities reporting issuer
o 2 Governmental authority
o 3 Bank
o 4 Credit union
o 5 Depository institution holding company
o 6 Money services business
o 7 Broker or dealer in securities
o 8 Securities exchange or clearing agency
o 9 Other Exchange Act registered entity
o 10 Investment company or investment adviser
o 11 Venture capital fund adviser
o 12 Insurance company
o 13 State-licensed insurance producer
o 14 Commodity Exchange Act registered entity
o 15 Accounting firm
o 16 Public utility
o 17 Financial market utility
o 18 Pooled investment vehicle
o 19 Tax-exempt entity
o 20 Entity assisting a tax-exempt entity
o 21 Large operating company
o 22 Subsidiary of certain exempt entities
o 23 Inactive entity
Consult with a Tampa Accountant today with our team at Taxes Tampa if you're unsure about who is required to be reported on your BOI to FinCEN for 2024/2025.
#2 - What do you need to report and who will see it?
Once you determine IF you need to file, next is determining WHAT you need to file.
What you need to report to FinCEN on the BOI Report:
Identifying information about the individuals who directly or indirectly own or control your company.
What you will report about your company: legal name, any DBAs, address(es), Tax ID, and jurisdiction of formation.
What you will report about your owner(s): legal name, date of birth, address, and an identification number from a passport or driver's license.
Once you file your BOI, who will have access to that information?
According to FinCEN’s website, “FinCEN will permit Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. Financial institutions will also have access to beneficial ownership information in certain circumstances, with the consent of the reporting company.”
Consult with a Tampa Accountant today at our team at Taxes Tampa if you need help deciding what to report on your FinCEN BOI.
#3 - Deadlines for filing the FinCEN BOI and Penalties for not filing.
Depending on when you opened your company, your deadline may be 01/01/2024 or 01/01/2025.
If your company was created before 01/01/2024, you have until 01/01/2025 to report your ownership information.
If your company was created on or after 01/01/2024, you have 30 days to report your ownership information.
There is no fee to submit the beneficial ownership information report to FinCEN on or after 01/01/2024.
Penalties for not filing the BOI with FinCEN:
You could face civil and criminal penalties if you disregard your beneficial ownership information reporting obligations.
Penalties could include civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000.
Contact our Accountants in Tampa today to help you figure out and navigate the newfound FinCEN reporting requirements!
Why Work With Taxes Tampa?
For over a decade, Taxes Tampa has sought to be a communication-focused Tampa Accounting firm. We don’t operate on a volume-based business model which allows us to check in with our clients more than the average accountant in Tampa and offer our clients a more hands-on and advisory tax experience. We want to ensure you understand the ABCs of LLCs, Taxes, and everything in between. Contact us today for a free tax consultation with one of our Tax Accountants in Tampa!
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Frequently Asked Questions:
Can a parent company file one report on behalf of itself and all beneficiaries?
No, FinCen has stated that each entity must file its own report.
Where should I file the beneficial ownership information report?
Please go directly to FinCEN’s website https://www.fincen.gov/boi to file the report. Its expected that there will be many scams in the form of mail and email. Please note that FinCen charges no fee to file the BOI.
What if I’m registered in a state like Wyoming or Delaware that already hides my identity?
You will still have to file the BOI with FinCen and this won’t change or adjust your secretary of state filings/anonymity at the state level.