TAX BULLETIN – Tax Tips, News, & Updates: Issue No. 1 | Vol No. 8
FinCEN reporting requirements have been enforced for decades, specifically for companies and individual operating business outside of the United States and for citizens living and working outside of the USA who were subject to foreign investments, currency, and exchange requirements. However, with the increase of financial crimes and money laundering during the past several years, the Federal Government has implemented a new law expanding reporting requiring including Beneficial Ownership Information (BOI)!
The Overview of FinCEN the Corporate Transparency Act (CTA) of 2021
Financial Crimes Enforcement Network (FinCEN) is a regulatory Federal agency whose missions is to “safeguard the financial system from illicit use, combat money laundering and its related crimes including terrorism, and promote national security through the strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence” (fincen.gov).
Beneficial ownership means individuals who own or control a company directly or indirectly.
The Minutia of the CTA!
The law that mandates such reporting is known as the Corporate Transparency Act (CTA) passed by Congress in 2021. It permits Federal, State, local, and Tribal officials, as well as certain foreign officials who submit a request through a U.S. Federal government agency, to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement. The reporting requirements are complex; therefore, FinCEN is encouraging companies to get educated on why, how, and where to report.
To Acquire More Information!
To know if your company is exempt from reporting and this Law, you can visit the FinCEN page here, https://www.fincen.gov/boi-faqs#A_1
Overview of the Reporting Process
FinCEN launched the BOI E-Filing website for reporting beneficial ownership information on January 1, 2024. (https://boiefiling.fincen.gov)! Although the reporting requirement became effective in 2022 with reporting to begin on January 1, 2024, FinCEN has extended the dates to allow companies to familiarize themselves with the CTA Law and to begin the reporting. The current due dates are as follows:
- A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.
- A reporting company created or registered in 2024 will have 90 calendar days to file after received actual or public notice that its creation or registration is effective.
- A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
- Not all companies are required to report as there are exceptions to some companies that already have other regulatory reporting restrictions which the government use as data which are alternatives to the CTA reporting.
SSCPA Consulting can assist clients with the basic education about this CTA and reporting requirements, and other information, but cannot engage in completion of the reporting process. We encourage clients to complete reporting on a timely basis. To do so, please review the BOI to FinCEN and use the guidance here that FinCEN has issued.
WE HOPE YOU ENJOYED & LEARNED FROM THIS MONTH’S BULLETIN!
Contact us for more information which is specific to your situation as there are always exceptions to the IRS rules and specific to the states’ rules!
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