The filing deadline for BOI reporting is January 1, 2025 for entities formed prior to 2024. BOI information needs to be submitted to FinCEN by that date or entities may face penalties of $591 per day. Additionally, individuals could face a fine of up to $10,000 and up to two years in prison if the failure to file is considered “willful”. Errors in filing may also be subject to penalties.
Who needs to file?
Most entities formed under state law will need to file and report BOI information. This includes: LLCs, C and S Corporations, HOAs, and LLPs. Generally, most non-profit organizations and governments are exempt from filing and certain larger entities (receipts over $5M who also file payroll tax returns) are also exempt. A list of exemptions can be found here: https://fincen.gov/boi-faqs#C_2 However, there is no minimum size for exemption so single member LLCs, which are often disregarded for tax purposes, do need to report.
What information needs to be reported?
Information related to the beneficial owners of each entity will need to be reported. This includes the beneficial owners: name, date of birth, residential address, identifying number from an acceptable identification document (generally, a driver’s license or a passport). An image of the identifying document will also need to be included.
Who is a beneficial owner?
Beneficial owners include: anyone owning 25% or more of an entity and anyone with financial control related to an entity including those with C Suite titles (CEO, CFO, CAO, COO, Etc.), those who can make financial decisions, and board members.
How do I report the BOI information?
You can file the report on your own using the BOI Efiling system: https://boiefiling.fincen.gov/ Please be sure to review the Small Entity Compliance Guide before filing because there are certain requirements that need to be met https://fincen.gov/boi/small-entity-compliance-guide
Can Smith Schafer help with filing?
Yes. We can help with the filing and are working to assist you using a software that will track your filing and the history of the information reported. You can email us at [email protected] to get the process started or to answer any questions you have regarding the filing. Our fee for filing is $450 per filing.
When do you need my information if Smith Schafer is completing my filing?
We would prefer to have information by December 15th to allow adequate time to follow up if there are outstanding items and to assist in making sure that all of the filings can be completed timely.
Is there anything else I need to know?
There have been several lawsuits related to the constitutionality of this reporting requirement. In March of 2024 an Alabama court ruled that the Corporate Transparency Act, which is the act authorizing the BOI reporting, was unconstitutional. The case is in appeals, but it could take a couple of years before the final determination is made as to the constitutionality of the law. There is uncertainty while it awaits appeal. If it is ultimately heard by and held unconstitutional by The Supreme Court then entities would not have needed to report this information. However, if it is held to be constitutional by The Supreme Court or if they decline to hear it, then the law is in force and the penalties apply from the date the filing was required, January 1, 2025.
Additionally, on November 5th, more than 40 members of Congress sent a letter to FinCEN requesting a one-year delay on BOI reporting. FinCEN has not yet publicly addressed the requested delay, but may do so in the coming weeks.
