Important BOI Reporting Requirements

The Financial Crimes Enforcement Network (FinCEN) issued a final ruling regarding a new filing requirement for 2024 regarding corporations, partnerships, and LLCs.

This new ruling will aid the ability of FinCEN and other agencies to protect the U.S. national security and financial system from illegal activity by providing vital information to law enforcement, intelligence, and financial institutions to stop money laundering by criminals, fraudsters, corrupt individuals, and others. 

You may be subject to these requirements and therefore must file a report called the Beneficial Owners Information Report (BOI or BOIR). If you have a filing requirement, the report must be filed before January 1, 2025, at the following website: https://boiefiling.fincen.gov/. 

Below are a few key elements of the BOI reporting rules (https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet):

• There are two types of reporting companies: domestic and foreign.
  
  
• A domestic reporting company is a corporation, limited liability company (LLC), or any other entity that was created by filing a document with a secretary of state or any similar office under the law of a state or Indian Tribe.
  
  
• A foreign reporting company is a corporation, limited liability company (LLC), or any other entity that was formed under the law of a foreign country and is registered to do business in any U.S. state or tribal jurisdiction by filing a document with a secretary of state or any similar office under the law of a U.S. state or Indian Tribe.
  
  
• If you have any uncertainty about your entity’s status as a domestic or foreign reporting company, please check with your entity’s attorney.
  
  
• A Beneficial Owner is anyone who (A) exercises “substantial control” over a reporting company, or (B) directly or indirectly owns or controls at least 25% of the ownership interest of a reporting company.
  
  
• When filing the BOI report, you are required to identify the company and report four pieces of information about each of the beneficial owners:
  
  
• Name
  
  
• Birthdate
  
  
• Address
  
  
• Identifying Document (driver’s license or passport).
  
  
• If your company was created before January 1, 2024, you have until December 31, 2024, to file the initial report. If your company was created after January 1, 2024, you have 30 days from the date of creation to file your report.
  
  
• If your company has any changes to the initial report (i.e., a change of address), you must file another report with FinCEN within 30 days of the change.
  
  
• Failure to file timely may be costly. Willful violations can carry civil penalties (e.g., $500/day for each day past a deadline) and, in some cases, criminal liability (up to $10,000 in fines and up to two years in prison).

Scammers may attempt to solicit information for BOI reporting by sending unsolicited correspondence that requests payment or personal information. You should be aware of these scams and not engage with them: 

• Requests for payment - FinCEN does not charge a fee to file a BOI report, and they do not send correspondence asking for payment.
  
  
• Requests to click links or scan QR codes - Do not click any suspicious links or attachments, or scan any QR codes in emails, on websites, or in any unsolicited mailings.
  
  
• References to "Form 4022" or "Important Compliance Notice" - FinCEN does not have a “Form 4022,” and any correspondence referencing this form is fraudulent.
  
  
• References to a “US Business Regulations Dept.” - This is a fraudulent reference, as there is no government entity by this name.
  
  
• Paper versions - Any paper version of the beneficiary ownership reporting is fraudulent.
  
  
• Suspicious URLs - When filing online, make sure you are on the official FinCEN website, www.fincen.gov. 

We are unable to file the BOI reports for you, but please reach out to your Walker & Armstrong tax professional if you have questions regarding this new requirement.