The Beneficial Ownership Information Report (BOIR) is an essential new filing requirement under the Corporate Transparency Act (CTA), designed to combat financial crimes and increase transparency in U.S. business practices. While this step forward enhances accountability, it also introduces critical compliance requirements for many businesses.
As a tax lawyer, I’ve assisted numerous clients in navigating the complexities of such reporting obligations. In this blog, I’ll break down who needs to file, what’s required, and the penalties for non-compliance—so you can stay ahead of the curve. If you’d like personalized guidance, I invite you to schedule an online consultation at your convenience.
What is the BOIR?
The BOIR is a filing required by the Financial Crimes Enforcement Network (FinCEN). It mandates that businesses provide details about their beneficial owners, defined as individuals who either:
1. Exercise substantial control over the entity, or
2. Own or control at least 25% of the company’s equity.
The goal of this report is to prevent the misuse of anonymous shell companies for money laundering, tax evasion, and other illicit activities.
Who Needs to File?
The BOIR applies to:
- Domestic entities such as corporations, LLCs, and other entities created through state or tribal filings.
- Foreign entities registered to do business in the U.S.
Exemptions:
Certain entities are exempt from filing, including:
- Publicly traded companies
- Banks and credit unions
- Investment companies and insurance firms
- Large operating companies with:
- More than 20 employees
- Over $5 million in gross revenue
- A physical presence in the U.S.
-Nonprofit organizations are also exempt.
Information Required for the BOIR
1. For Beneficial Owners:
- Full legal name
- Date of birth
- Residential address
- A unique identifier (e.g., a passport or driver’s license number)
2. For the Company:
- Legal name
- Address
- Taxpayer Identification Number (TIN) or equivalent
Filing Deadlines
The filing deadlines depend on when the entity was created or registered:
- Entities formed before January 1, 2024: Must file by January 1, 2025
- Entities formed on or after January 1, 2024: Must file within 30 days of formation or registration
Where to File?
The BOIR must be filed electronically through FinCEN’s Beneficial Ownership Information (BOI) Reporting System. This system is secure, user-friendly, and free of charge. For more details, visit the FinCEN website.
Penalties for Non-Compliance
Non-compliance with the BOIR requirements carries significant consequences:
- Civil penalties: Up to $500 per day for ongoing violations
- Criminal penalties: Fines of up to $10,000 and/or up to 2 years in prison for willful violations or providing false information
These penalties underscore the importance of accurate and timely filings.
Do You Need Help?
As a tax lawyer with experience in U.S. and international compliance, I can assist with:
- Determining whether your entity is required to file
- Identifying your beneficial owners
- Ensuring your report is accurate and complete
- Addressing related compliance concerns, such as FATCA or international tax obligations
Navigating the BOIR can feel overwhelming, but you don’t have to do it alone. I offer online consultations to provide tailored advice and actionable steps for your specific situation. Together, we can ensure your business meets its obligations and avoids costly penalties.
Schedule a Consultation Today
Complying with BOIR requirements involves careful attention to detail, especially when determining who qualifies as a beneficial owner and ensuring the information provided is accurate. With years of experience helping businesses navigate U.S. and international compliance, I can offer clear guidance tailored to your needs.
If you’re unsure about any aspect of the BOIR or how it applies to your business, I’m here to help. Let’s discuss your specific situation and ensure your filing is handled smoothly and correctly.
Reach out today to schedule a consultation, and together, we’ll make sure you’re fully compliant and protected from potential penalties.
