Earlier this year, we wrote about beneficial ownership information (“BOI”) reporting requirements of the Corporate Transparency Act (“CTA”) signed in to law in January 2021.  Click this link to see the original post.

In Q4 of 2023 and Q1 of 2024, congressional leaders and professional associations made efforts to extend the deadline to make the initial and annual filings.  A bipartisan bill (H.R. 5119) that would extend the reporting deadline by one year passed the House 420-1 in December 2023, before stalling in the senate.  Although an extension is still possible, it appears more and more unlikely with each passing day.

In March 2024, a federal court ruled that the BOI reporting requirements of the CTA was unconstitutional.  The decision is currently under appeal.  In the meantime, FinCEN has agreed not to enforce the BOI reporting requirements and related penalties for noncompliance only for the plaintiffs of the lawsuit, and not for the public as a whole.

As a result of the congressional efforts to extend and the federal court ruling the CTA unconstitutional, many business owners may mistakenly overlook the reporting deadlines.

As of today, an initial BOI report must be filed by January 1, 2025, if your entity existed as of January 1, 2024. If the entity is created or registered to do business after January 1, 2024, the initial report is due within 90 days. The 90-day window starts after receiving notice from the secretary of state that the creation or registration is effective.

At this time, Dent Moses is not preparing or filing BOI reports for our clients.  The BOI report filing is not a tax filing, which means CPA firms do not have clear legal authority to prepare these reports for clients.  There is a widespread concern among the CPA community that preparing BOI reports for clients could be considered the unauthorized practice of law.  Until that uncertainty is resolved, we expect most CPA firms will not prepare BOI reports for clients.

We recommend all business owners consider the following:

1. Read the brochure, reference guide, and compliance guide documents published by FinCEN to determine if your entity is subject to the BOI reporting requirements. There are a number of exemptions based on the type of entity, industry, and size of the business.
   1. Brochure
   2. Reference Guide
   3. Compliance Guide
2. Consult with legal counsel, especially if the information provided in the FinCEN published guidance or the specific application to your entity is unclear
3. Gather the necessary personal information for all beneficial owners of your entity. Alternatively, each beneficial owner can obtain a FinCEN identifier number to provide in lieu of providing their own personal information for each entity they own.
4. File the BOI report prior to the deadline. Anyone can file a report on the FinCEN website that is available to the public.  Alternatively, you can engage a legal professional or a third-party service such as WoltersKluwer (CT Corporation) to assist with the filing.
   1. FinCEN BOI Filing Website
   2. WoltersKluwer Website
5. Consider requirements to file future reports if there are changes that require an updated report.

As the deadline approaches, we will certainly get you up to date with any additional developments.