Tax & Accounting Update
Corporate Transparency Act — Beneficial Ownership Information Reporting Requirement
In this newsletter I am going to give you a summary of the new reporting requirement which was passed by Congress in 2021 that took effect January 1, 2024.
Based on Corporate Transparency Act the new Beneficial Ownership Information report will need to be filed starting January 1, 2024, with the Financial Crimes Enforcement Network (FinCEN) - www.fincen.gov.
If you do not own any LLCs or corporations that are established with any Secretary of State, then this reporting requirement will not apply to you.
This report is not a tax filing and cannot be filed with your tax return. It is a totally separate filing directly through the FinCEN website. The new filing requires proof of identification of the owners of the entities being reported. This will be a scanned copy of a driver's license or passport that must be uploaded to the FinCEN website. All that is required to be submitted is the name of the business entity, the federal employer ID number of the entity and the name and address of each owner plus the scanned copy of their identification. It is not a complex process, but it is important to understand the need to file this report for every entity you own that is required to file. If you established an LLC or corporation but never did anything with that particular entity, you may still have a filing requirement.
Those companies that do not fall under an exemption, the Corporate Transparency Act reporting requirements become effective as follow: If an entity was formed on and after January 1, 2024, filing is required within 90 days of formation.
All other entities that were formed prior to December 31, 2023 are required to file BOI report no later than January 1, 2025.
Penalties for willfully not complying with the BOI reporting requirement can result in criminal and civil penalties of $500 per day and up to $10,000 with up to two years of jail time.
Please click on the link below to read the additional information and to see if you do have a filing obligation.