As of January 1, 2024, a pivotal change has been set into motion with the initiation of the Beneficial Ownership Information Reporting Requirement (BOI Reporting) by the Financial Crimes Enforcement Network (FinCEN).
Understanding Beneficial Ownership
BOI Reporting has been introduced to enhance transparency in corporate structures. It requires beneficial owners, or individuals who own or control a significant interest (more than 25%) in a company, to disclose relevant, identifying information. With its mandate being rooted in preventing illicit activities, aiding financial integrity, and aligning the United States with global standards for corporate transparency. Essentially giving the Tax Man oversight on all vested interests in your business, and ensuring that they pay their dues accordingly.
Reporting companies must typically provide the following insights about their beneficial owners:
- Name;
- Date of birth;
- Address; and
- The identifying number and issuer from either a non-expired U.S. driver’s license, a non-expired U.S. passport, or a non-expired identification document issued by a State.
Who must file
- Most domestic reporting companies.
- Foreign reporting companies with a U.S. presence.
- Exemptions exist, but the majority of small businesses in the U.S. fall under the reporting requirement.
Key reporting timelines
- Companies existing before January 1, 2024: The deadline for the initial BOI Report is January 1, 2025.
- Companies created between January 1, 2024, and January 1, 2025: The deadline is 90 days from creation for the initial BOI Report.
- Companies formed after January 1, 2025: 30 days from creation for initial BOI Report.
How to report your company’s beneficial ownership information
- You can report beneficial ownership information via the BOI E-Filing website launched by FinCEN on January 1, 2024.
- Access the form by going to FinCEN’s BOI E-Filing website and selecting File BOIR.
- You may benefit from consulting a finance or legal expert if you have started or plan to start a business in 2024 and beyond.
Streamlining Compliance and Enhancing Transparency
In summary, the Beneficial Ownership Information Reporting Requirement is crucial for promoting financial integrity. It represents a significant step in the ongoing efforts to combat money laundering.
Moreover, it ensures a more secure and transparent business environment. While it’s vital to consult with your tax attorney on BOI reporting, a CPA can be an invaluable link in this partnership.
From invaluable knowledge to strategic guidance, we can help you navigate the regulatory landscape effectively. Contact us for help today.
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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. We base articles on current or proposed tax rules at the time of writing and do not update older posts for tax rule changes. We expressly disclaim all liability regarding actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
