Enacted as part of the 2021 National Defense Authorization Act and amending the Bank Secrecy Act, the Corporate Transparency Act (CTA), beginning on January 1, 2024, many companies in the United States will have to report information about their beneficial owners, i.e., the individuals who ultimately own or control the company. They must report this Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury.
While BOI reporting, on its face, may appear to be a tax filing, it is administered by FinCEN, not the Internal Revenue Service (IRS). Accordingly, BOI reports, and specifically the analysis and determination of which companies must file, could be viewed as legal advice and the Unauthorized Practice of Law (UPL) by a tax professional. As such, PeachCap cannot complete this on your behalf. This act was created to curb money laundering and other illegal acts committed through LLCs and limited partnerships. Any LLC or Limited Partnership created before 1/1/2024 has 1 year (2024) to comply, while any newly created entity has 90 days from creation to comply. The penalties for noncompliance include civil penalties of up to $500 per day that a violation is not remedied, a criminal fine of up to $10,000 and/or imprisonment for up to two years.
You must report any “beneficial owner” defined as anyone owning at least 25% of the entity OR exercising substantial control over the entity. Once reported, if there is ever a change (address, ownership, including the expiration of the government document you attach to the report), you have 30 days to update the previous filing.
How to report? With your entity's FedID and a scanned copy of a government document (driver's license), go to http://www.fincen.gov/boi, then select “File a report using the BOI E-Filing System” and follow the instructions to complete the filing (it takes approximately 10 minutes to complete.)