NEW BOI Reporting Explained (Does Not Reporting Really Cost $500 Per Day!?)
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- Опубликовано: 20 янв 2024
- Handout: www.dropbox.com/scl/fi/qjyzs1...
Website:www.mikekellycpa.com
Corporate Transparency ACT or CTA
The Corporate Transparency Act (“CTA”) was enacted January 1, 2021, as part of the National Defense Authorization Act, representing the most significant reformation of the Bank Secrecy Act and related anti-money laundering rules since the U.S. Patriot Act. The CTA is intended to address and guard against money laundering, terrorism financing, and other forms of illegal financing by mandating certain entities (primarily small and medium size businesses) to report “beneficial owner” information to the Financial Crimes Enforcement Network (“FinCEN”).
• Companies will report their beneficial ownership information to the Financial Crimes Enforcement network. FinCEN. A bureau within the Department of Treasury.
• The purpose is to stop the flow of illicit funds (such as money laundering).
• Beginning January 1st 2024 they will begin processing beneficial ownership information reports.
• The individuals reporting ultimately own or control the company, and their company applicants.
• Corporations, LLC, or any other entity created by the filing of a document with the SOS. This applies to foreign companies as well.
• Examples of non-reporting companies include sole proprietorships and certain trusts.
• List of exemptions: See next page.
• A beneficial owner is an individual who directly or indirectly controls at least 25% or more of a reporting company or exercises substantial control over a reporting company. (Senior officers, individuals who have authority to point or remove certain officers of a company, decision makers of a company, etc.
• If a reporting company was formed prior to 2024 it is only required to report its beneficial owners and not company applicants.
• If a reporting company formed on January 1, 2024 or after they are also required to report their company applicants.
• What is reported?
o Legal name, any trade name or “DBA” name
o Complete US address
o State, Tribal, or foreign jurisdiction of formation
o For a foreign reporting company: State or Tribal jurisdiction of first registration
o Taxpayer identification number (TIN)
• What is reported for beneficial owners and company applicants?
o Name of individual
o Date of birth
o address
o ID # and issuing jurisdiction of a non-expired driver’s license, U.S. Passport, or an identification document issued by a State, local government, or Indian Tribe, or foreign passport.
• FinCEN Identifier - This is a unique number you will receive from FinCEN upon request after the individual or reporting company provides certain required information to FinCEN.
• When to file
o Companies formed before 2024 must submit their information to FinCEN by January 1 2025
o Companies formed as of January 1, 2024 must report within 90 calendar days of receiving actual or public notice that the reporting company’s creation or registration is effective.
o Starting January 1st, 2025 new reporting companies will only have 30 calendar days to file.
• How to file: You must do so electronically - FinCEN will be releasing updates. You can sign up for FinCEN updates per their website at www.FinCEN.gov/boi.
• If there is a change in your initial reporting you must file an updated report within 30 days.
• Not reporting can lead to civil and criminal penalties.
Penalties for non-compliance
Penalties for willfully violating CTA reporting requirements include (1) civil penalties of up to $500 per day that a violation is not remedied, (2) a criminal fine of up to $10,000, and/or (3) imprisonment of up to two years. A safe harbor from the penalty is available to Reporting Companies that file corrected reports with FinCEN no later than 90 days after submission of an inaccurate report
(31 U.S.C. 5336(h)(3)(C)).
www.fincen.gov/boi-faqs
www.fincen.gov/boi/small-busi...
I heard it’s one and done. Only if there are changes do you need to go back n make the change with BOI.
This is such an overreach. Why can they just go to each States Secretary of State to pull info.
The government makes it harder and harder to do business. I so want to retire wish I could.
So I guess they are looking for something like. If money came in from overseas and went to 20 different shell companies and then they distributed that to 10 different companies and then distributed to one owner. Wait this sounds familiar to…you know…
Happy New Year 😂 Happy to see another video from you.
Hey Freddie! Happy New Year! Thanks! Wish I could make so many more. A little more growth in my business and some additional help then I should be able to do so :)
Great reminder information!
Thanks for watching!
Omaigaaaa (Spanish mode) lol. This is amazing Mike thanks for sharing all of this man. 🤯 Sharing this with my LLC Business Friends.
Awesome! Thank you!
One more quick question. Do you know if the agency will be sending out letters to current businesses letting them know about this new reporting? I’m just wondering how companies will know about this if they don’t get notified somehow.
Thank you. What form do I complete to switch from S corp to LLC?
Yep I agree
What if you are a single member LLC where the income flows through to your personal return. Do you still use the EIN or the SSN that you file under?
Great question - SIngle member LLCs would be subject to this as well. I suspect the EIN would be used. A sole prop would not need to report, but if you have a single member LLC you would as far as I am aware of.
My question is is there an amount threshold on an LLC? Let's say I have an LLC but only made like 12k for the year or is it all LLCS regardless of the income
Great question - no income threshold that I am aware of. It is ALL LLCs except for certain business entity types which are shown in the handout.
If you put your c corp in a trust is it exempt?
Good question, but the answer would be no as far as I am aware of. The full list of exemptions is on their website.
Cant they get all the required information from K-1s of the LLCs where applicable?
Good question - My answer is its the government and the different departments are not good at talking to one another. I suppose they could if they wanted to, but perhaps they do not have access to the people's tax information.
@@MoneyandLifeTV perhaps if they dont, then nothing stops one by providing false information which may be the sole purpose of this reporting rule and obviously you cant expect thieves or rule breakers abide by the rule whom they are trying to catch.
Maybe they are waiting for the budget pool that they will get by imposing all the fines, to hire someone write up script to make the database pull. Just saying.
Ideally they should start integrating with tax software so that BOI is passed/filed with relevant department along with IRS at the same time because there are chances that BOI may change for many businesses who may have change in partners. I'm sure you see those cases, not sure how often those changes are however.
Does this apply to nonprofits that have no owners and is controlled by a board of trustees?
Also home owner/condo associations?
Hi Erin! Non-profit entities are currently exempt according to the FinCen website
Hi Nick, Good question, but not entirely sure on that one please check the FinCen Website. There is a good chance you will have to report. On FinCen you can contact a rep directly to pose that question and that is exactly what I would do if I were in your shoes.
@@MoneyandLifeTV Awesome. Thanks for the reply!
Reminds me of the FATCA burden on ordinary people. #SMH
This one really does target smaller business owners specifically. Mega corps and banks are exempt.