New Federal Reporting Requirement for Beneficial Ownership Information
A note to all of our clients:
We are writing to you regarding new reporting requirements for many businesses, which can include Single member and multi member LLC’s, C and S Corporations.
Starting January 1, 2024, certain businesses will be required to comply with the Corporate Transparency Act (CTA) which includes the filing of Beneficial Ownership (BOI) reports. These reports will be administered by the Financial Crimes Enforcement Network (FinCEN) and establishes a database of companies’ beneficial ownership information to be used by law enforcement. This is not an Internal Revenue Service (IRS) issue.
A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
There are significant penalties for missing filing deadlines, including criminal (fines and/or imprisonment) or civil (monetary) penalties. There is a $500 per day penalty, up to $10,000, and imprisonment of up to two years for the WILLFUL failure to timely file initial or updated reports.
Assisting with compliance and or filing of the CTA, including BOI reporting, is not within the scope of services we provide. It will be your exclusive responsibility to comply with CTA, including its BOI reporting requirements. Information can be found at https://www.fincen.gov/boi. Please consult with legal counsel on additional questions and or concerns regarding how BOI reporting requirements and issues effects your company.
As stated previously, compliance with the CTA, including the BOI reporting applies to most businesses including single member LLCs, which are treated as a disregarded entity for income tax reporting. A disregarded entity does not have a filing requirement with the Internal Revenue Service.
Finally, we wish to emphasize that we are sending you this letter to make you aware of these new current reporting requirements, associated risks, and suggest you contact legal counsel to assist you with the CTA and related BOI filings for entities that you own or control.
Michael Schoppe, EA