Update: A Texas federal court has issued a nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (CTA). For more details on the ruling and its implications, read our latest article here.
As the deadlines for Beneficial Ownership Information (BOI) reports to be filed with the Financial Crimes Enforcement Network (FinCEN) approach, it is crucial to remain vigilant about potential reporting obligations and to watch out for scams that continue to emerge in the space. We hope this article serves as a good reminder that despite ongoing legal challenges, the Corporate Transparency Act (CTA) is still the law, and the requirements, deadlines, and penalties still apply.
Reporting Deadlines
The BOI reporting requirements enacted in the CTA apply to corporations, LLCs, or any similar entities created by the filing of a document with a secretary of state or any similar office. Those businesses are required to disclose information about their beneficial owners directly to FinCEN, and failure to file accurate and timely reports could result in significant penalties.
- Existing entities formed before January 1, 2024, have until January 1, 2025, to submit their BOI reports.
- New entities formed or registered after January 1, 2024, must report BOI within 90 days of formation.
Key Reporting Details
- There are 23 types of organization that are exempt from the reporting requirements.
- The reports require information (name, date of birth, address, ID number and image) on “beneficial owners,” which means anyone who directly or indirectly, exercises “substantial control” over a reporting company or owns or controls at least 25% of the ownership interests of a reporting company.
- New entities formed or registered after January 1, 2024, must also report their “company applicants,” who were involved in the creation and registration of the company.
Beware of Scams and Protect Your Business Information
With the rollout of these new reporting requirements, fraudulent schemes are targeting businesses with misleading or fake correspondence. Below are some common scams we are seeing:
- Correspondence Requesting Payment: There is no fee to file BOI directly with FinCEN. Be aware that FinCEN does not send correspondence requesting payment for BOI filing. Do not send any money in response to these requests, as they are not legitimate.
- Suspicious Links or QR Codes: Beware of emails or letters that ask you to click on suspicious URLs or scan QR codes to file your BOI. Do not click on any links, attachments, or scan any QR codes from unsolicited or suspicious correspondence.
- Fraudulent Forms: Scammers may send out forms that reference “Form 4022” or
“Form 5102,” which are not legitimate forms. Do not submit your BOI information on such forms. - Fake Government Entities: Correspondence mentioning the “US Business Regulations Dept.” is fraudulent, as no such government entity exists. If you receive documents or letters from such entities, disregard
How to File Safely
BOI reports are filed for free via the official FinCEN BOI filing portal. Always ensure you are accessing the site directly through FinCEN’s website and never through third-party links from unsolicited emails or mailings.
Please see the below examples for reference:
We are here to help ensure your compliance and protect your business from fraud. If you need further guidance or have any questions regarding BOI filing, please do not hesitate to reach out.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
