As this reminder was going to press, a Texas-based federal court issued a preliminary injunction prohibiting the federal government from enforcing the requirement to report Beneficial Ownership Information (BOI). The federal government is expected to appeal the court’s decision. As this is not a final decision, the injunction on enforcement is temporary; however, enforcement could resume if the injunction is later reversed. Please consult your attorney if you have yet to file.
As a reminder, FinCEN BOI Reports are due no later than January 1, 2025. Entities are required to report their beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Department of the Treasury. FinCEN established this reporting requirement “to make it harder for bad actors to use shell companies to hide their ill-gotten gains and to help law enforcement identify who is behind these bad companies.”
Please review the information below and contact your HM&M advisor with any questions or for additional support. An outline of the filing requirements is provided below:
Who
- All domestic and foreign entities that have filed formation or registration documents with a U.S. state will be required to report information about their beneficial owners.
- There are 23 exceptions to filing, including publicly traded companies, securities brokers/dealers, tax-exempt entities, etc.
- A beneficial owner is any individual who, directly or indirectly, owns or controls 25% of an entity or any individual who exercises substantial control over the entity.
What
- Each entity must report: full legal name of reporting company and any trade names, business address, state of formation, and IRS Tax Identification Number.
- In addition, each entity must report the following details on beneficial owners: name, birthday, address, and an identification document (such as driver’s license or passport) containing a unique identifying number and issuing jurisdiction. An image of the identification document must be provided.
- Reporting companies created or registered on or after January 1, 2024 will also need to report their company applicants.
When
- New entities (created/registered in 2024) must file within 90 days.
- Existing entities (created/registered before January 1, 2024) must file by January 1, 2025.
- Changes to information on previously filed reports must be filed within 30 days. This includes addresses, expired drivers licenses and passports, etc.
- New entities (created/registered in 2025) must file within 30 days.
Where
- Electronic filling is required for BOI reporting.
- Secure filing is available via the new FinCEN Beneficial Ownership Secure System (BOSS).
This information is meant to provide a general overview of reporting requirements. The Treasury Department is continuing to revise and update some of the rules and regulations surrounding this new filing requirement. We will continue to monitor for new information and will provide updates as material becomes available. If you have any questions please contact your HM&M advisor.
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