BOI Regs Aimed at Cracking Down on Criminal Enterprises
BOI – Beneficial Ownership Information – reporting starts at the beginning of next year. You may not have heard of it, but this new requirement is going to affect many, if not most, small business owners who operate S corporations, C corporations or LLCs.
BOI Reporting: What Is It?
Starting January 1, 2024, individuals who own or control a company – who the Feds call their beneficial owners – will have to report information about their companies and themselves to the government. The Financial Crimes Enforcement Network, known as FinCEN, will require the following information about the company:
- Legal name, and any dba names it conducts business under
- Jurisdiction of formation (where it was started)
- Taxpayer identification number
And require this information from the beneficial owners:
- Legal name
- Home address
- Identifying number from a driver’s license, state ID, or passport, and an image of the document that the number is taken from
Why does FinCEN want the info? They’re hoping to cut down on criminal activities like money laundering, drug trafficking and tax evasion. This data, the thinking goes, will reveal the actual ownership of an enterprise, and the people who stand to benefit from the money flowing through the company.
The info won’t be out there for just anyone to see, though. It will only be available to certain “authorized requesters,” such as law enforcement and national security organizations, the Treasury Department, and some government agencies that oversee financial institutions.
Who Has to Report?
If you formed a C or S corporation, or a limited liability company, you can figure on reporting. Large companies – with more than 20 employees and more than $5 million in gross receipts previous year – won’t have to file, however.
And there are 23 other exempt entities as well, including certain financial institutions, securities brokers, investment companies, government agencies, public utilities, 501(c)-recognized tax-exempt organizations, and more. If you want to find out for sure, ask your friendly neighborhood accountant.
How and When to Report BOI
Reporting will start January 1, 2024 through an electronic portal on the FinCEN website. Companies formed or registered before January 1, 2024 will have until January 1, 2025 to report their BOI. But if you form a company after the beginning of the year, you’ll have 30 days to report the BOI (there is an effort underway to push that deadline out to 90 days).
FinCEN has this FAQ link.
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