“Surprise!” -the IRS

Ok maybe this wasn’t exactly a surprise to most people but it might have been for you. But don’t worry this isn’t a scary IRS surprise. It’s just an extra step and it’s TOTALLY doable. In fact, you can do it right here, right now. 

First things first, what are we even talking about? And why do I care? The Beneficial Ownership Information Report (BOIR) is a new filing requirement as of January 1st, 2024. If your business is registered with a secretary of state such as an LLC, Partnership, or Corporation.  Each company needs to file the BOIR and include the ownership information for each owner where he/she directly or indirectly: (1) exercises substantial control over the company, or (2) owns or controls at least 25% of the company. But the good news is, it’s super easy to file. But the good news is, it’s super easy to file!

Report? What am I reporting? Your name, birthdate, and address (can’t be a P.O. box) and a unique identifying number from a State-issued driver’s license, ID or U.S. passport. Along with the image of that document. 

Is this an annual thing? Nope! Once you file your initial BOIR you will only refile when there are changes that would require an updated BOIR. For example: Changes to the information reported for your company, such as registering a new business name. A change in owners, such as a new CEO, or a sale that changes who meets the ownership interest threshold of 25 percent. Any change to an owner’s name, address, or unique identifying number. That would be if you received a new driver’s license or other identifying document that includes a changed name, address, or identifying number.

When should I report? Luckily you can get this checked off your to do list right away and after reading the penalties…you’ll want to! If your business was registered prior to January 1, 2024, you have until January 1, 2025 to file your initial BOIR.  If your business is created between January 1, 2024, and January 1, 2025, then you have 90 days after receiving public notice that its creation is effective to file your initial BOIR. 

How and where can I report? FINCEN has worked hard to make this filing process fairly straightforward. So there are two ways to file.1. Prepare the report online and submit it now. Or2. Prepare the report offline at your own pace, save as you go and submit later.

Why should I do this? Don’t wait…the penalties for not filing are steep. A person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. That person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.I mean if the penalties didn’t convince you…hopefully this will! The Treasury Department has estimated that $300 billion in illicit proceeds are generated annually from criminal actors, including oligarchs, financiers of terrorism, drug traffickers, human traffickers, and those who would use anonymous shell companies and other corporate structures to hide their ill-gotten gains. To crack down this issue, in 2021 Congress passed the Corporate Transparency Act. This law creates a new beneficial ownership information reporting requirement to be filed with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Have questions or need help? You know we always have your back! If you have questions, you can review the FAQ provided by FinCEN.  In addition, you are welcome to Book a 30-Minute Consult and we can help you!  In either case, you will want to have your business information and your driver’s license available and be at your computer. So yeah, this was something new to deal with BUT it’s really nothing to dread! You’ve got this!

xoxo, Your Accounting Besties