New Year, New Reporting Requirements

Happy New Year! This new year brings new reporting requirements for many of you. In 2021, Congress enacted the Corporate Transparency Act. This law creates beneficial ownership information (BOI) reporting requirement as part of the government of the United States efforts to make it harder for people to hide or benefit from their illegal gains through shell companies or other opaque ownership structures.

Beginning on January 1, 2024, many companies and trusts in the United States will have to report information about their beneficial owners, the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network, FinCEN. FinCEN is a bureau of the U. S. Department of the Treasury.

Companies required to report are called reporting companies. Reporting companies may have to obtain information from their beneficial owners and report that information to FinCEN.

Your company may be a reporting company and need to report information about its beneficial owners if your company is:

• A corporation, a partnership, a limited liability company, LLC, or was otherwise crated in the United States by filing a document with a secretary of state or any similar office under the law of a state or Indian tribe; or
• A foreign company and was registered to do business in any U. S. state or with an Indian tribe by such a filing.

There are 23 types of entities that are exempt from the beneficial ownership information reporting requirements.

Reporting companies will have to report this information electronically through FinCEN’s website: www.fincen.gov/boi . Once filed, the system will provide you with confirmation of receipt. Make a copy of this receipt for your records.

Reports will be accepted starting on January 1, 2024.

If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.

If your company is created or registered on or after January 1, 2024, you must report BOI within 90 days of notice of creation or registration.

Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

Reporting companies who do not comply with the Corporate Transparency Act may face penalties up to $500 per day that a violation continues. Criminal penalties include a $10,000 fine and/or up to two years of imprisonment. If a report is filed that contains mistakes or an omission of information, you can correct the report within 90 days to avoid penalties.

The BOI reporting to FinCEN is neither a part of the tax filing of your business tax return nor that of your personal state or federal filing. We suggest you consult with your legal representative regarding any required filing.

For assistance you may reach out to: CorpNet - https://www.corpnet.com/start-business/boi-reporting/

For tax and accounting services please visit knktaxaccounting.com to schedule your initial consultation.

Karitsa Kerns, Enrolled Agent/Tax Advisor

ReplyForward