In 2021, Congress passed the Corporate Transparency Act with the intent to make it more difficult to hide or benefit from unlawful gains through shell companies or other opaque ownership structures. The law creates a new beneficial ownership information (BOI) reporting requirement that will impact many domestic and foreign companies. Domestic companies include corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States including federal disregarded entities. Foreign reporting companies are entities 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. The willful failure to report complete or updated information, or the willful attempt to provide false or fraudulent information could result in fines up to $10,000 and/or imprisonment for up to two years.
The reporting deadlines are outlined below:
- A reporting company created or registered to do business before January 1, 2024, will be required to file its initial BOI report by January 1, 2025.
- A reporting company created or registered on or after January 1, 2024, and before January 1, 2025, will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI report.
- A reporting company created after January 1, 2025 will have 30 calendar days after receiving notice of the company’s creation to file its initial BOI report.
Income tax preparation services provided by HBC CPA’s will exclude all BOI filing requirements.
HBC recommends consulting with legal counsel. For more information, visit the U.S. Treasury Financial Crimes Enforcement Network (FinCEN) website at www.fincen.gov/boi.
Check out the following link to important information concerning requirements and exemptions: BOI Small Compliance Guide v1.1 (fincen.gov).
To e-file your report, click “File a report using BOI E-Filing System” at www.fincen.gov/boi.