Recent Tax Updates

Deadline Approaching: Beneficial Ownership Report Filing Required by January 1, 2025

Corporations, limited liability companies, and certain other businesses existing as of January 1, 2024, are required to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.

This requirement stems from the Corporate Transparency Act (CTA), enacted in late 2021. The CTA empowers FinCEN to collect ownership information from specified “reporting companies” and share it with authorized government bodies and financial institutions to aid in combating financial crimes.

For in-depth guidance on how to meet the upcoming Beneficial Ownership Information (BOI) reporting requirements, visit our detailed article on the BOI Reporting Resource Center.

Companies Required to File a Beneficial Ownership Information Report

Businesses that must file include:

  • Corporations
  • Limited liability companies (LLCs)
  • Limited partnerships
  • Any entity formed by filing with the Secretary of State or similar state office

These entities must file a report unless they meet specific exemption criteria.

Exemptions from Filing a Beneficial Ownership Information Report

Certain types of companies are exempt from the requirement to file a Beneficial Ownership Information (BOI) report under the Corporate Transparency Act. Exempt entities include:

  • Accounting firms
  • Tax-exempt organizations
  • Large operating companies – Defined as entities that:
    • Have an active presence in the United States
    • Employ over 20 individuals within the U.S.
    • Generate more than $5 million in gross receipts or sales annually

Additionally, sole proprietorships and general partnerships are not subject to the reporting requirements, as they are not considered officially registered entities.

For a full list of exempt entities, refer to the Small Entity Compliance Guide on the FinCEN website, beginning on page 4.

Beneficial Ownership Reporting Requirement

As of January 1, 2024, reporting companies must file a Beneficial Ownership Information (BOI) report with FinCEN. The initial report deadlines are as follows:

  • By January 1, 2025 – For companies in existence as of January 1, 2024
  • Within 90 days of creation or registration – For companies established during 2024
  • Within 30 days of creation or registration – For companies established after December 31, 2024

For further details, refer to page 37 of the Small Entity Compliance Guide on the FinCEN website.

How to File a Beneficial Ownership Information Report

As of January 1, 2024, reporting companies must file a Beneficial Ownership Information (BOI) report with FinCEN. The initial report deadlines are as follows:

  • By January 1, 2025 – For companies in existence as of January 1, 2024
  • Within 90 days of creation or registration – For companies established during 2024
  • Within 30 days of creation or registration – For companies established after December 31, 2024

For further details, refer to page 37 of the Small Entity Compliance Guide on the FinCEN website.

How to File a Beneficial Ownership Information Report

Companies must file the Beneficial Ownership Information (BOI) report electronically through FinCEN’s online filing system. For step-by-step instructions, visit the BOI E-Filing Help and Resources page on the FinCEN website.

Penalties for Non-Compliance or False Reporting

Failure to file a BOI report, keep it up-to-date, or intentionally submitting false information can result in severe penalties:

  • $500 per day for each day the violation continues
  • Maximum penalty of $10,000 and/or up to 2 years of imprisonment

For More Information

See the following for more information:

Picture of Mark Castro, CPA

Mark Castro, CPA

Mark has been with CrossLink Professional Tax Solutions (CPTS) since 2008, but has been in the tax industry since 1990. As the government/tax industry liaison for CPTS, Mark has been very active in working with the IRS, States, and other tax industry members to help improve communications, promote standardization, and simplification of eFile systems. Mark has also been active with industry associations as a board member of the National Association of Computerized Processors (NACTP) and the Council of Electronic Revenue Communication Advancement (CERCA) for many years. These two associations work with the IRS and States to help solve key eFile and electronic tax system issues and work to improve the operations of the State and IRS eFile systems.
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