Josh Mullins - The Journal Record
May 14, 2024
Recently, there has been a significant amount of confusion regarding the new Beneficial Ownership Information (BOI) reporting requirements.
In early March of this year, a district court in Alabama granted summary judgment for the plaintiffs. These plaintiffs claimed the new BOI reporting requirements to be unconstitutional. This has led to many people believing that the requirements to complete the BOI reporting are no more.
However, the result referenced above only applies to the plaintiffs in the specific case.
Also, FinCEN (Financial Crimes Enforcement Network) has already appealed this ruling. There have been other cases filed to attempt to either delay or defeat this new reporting requirement across the country. Many other business and professional organizations have requested that FinCEN delay the filing requirements in order to let the court systems rule on the application of these requirements.
As of this time, the BOI reporting requirements are still in effect.
It is estimated that the filing requirements apply to more than 32 million entities with many more added each year. Per FinCEN, your company may need to report information about its beneficial owners if it is:
“A corporation, a limited liability company, or was created in the US by filing a document with the Secretary of State or any similar office under the law of a state of Indian tribe.
A foreign company and was registered to do business in any US state or Indian tribe by such a filing.”
Regarding the filing requirements, if you have an entity that needs to file and it was in existence prior to January 1, 2024, you have the entire 2024 calendar year to complete that filing requirement. If you created your entity after December 31, 2023, you have only 90 calendar days after your business registration is effective to report to FinCEN.
Also, once you complete the original BOI filing you will be required to file updates or corrections to FinCEN to report if any of the information related to the beneficial owners of the entity has changed or was inaccurate. These updates must be reported within 30 days of the date of change. An example of a reportable change is the change of resident address for a beneficial owner.
Since the BOI filing requirement for entities in existence prior to this calendar year isn’t due until January 1, 2025, you should consider if delaying your original filing provides you some time savings. If you or members of your beneficial ownership group are expected to move during this year or if you are planning to add to your beneficial ownership group during 2024, you may want to file the BOI report after you have completed these changes or at least keep in mind that you will need to file additional reporters within 30 days of change.
As if it wasn’t complicated enough to determine if an entity qualifies, or who a beneficial owner is, now with the courts involved, there’s even more to consider about this new law.
Josh Mullins, CPA, is a partner at Arledge, the largest locally-owned accounting firm in the Oklahoma City metropolitan area. Arledge is a recognized leader in the accounting industry offering practical solutions in the areas of tax planning, auditing, consulting, accounting advisory services and client accounting.
This article contains general information only and does not constitute tax advice or any other professional services. Before making any decisions or taking any action that might affect your income taxes, you should consult a professional tax advisor. This article is not intended for and cannot be used to avoid future penalties that may be imposed by the Internal Revenue Service.