With the passage of October 15th, you probably thought you were done with tax reporting. Actually, you are. But there is a new report called the Beneficial Ownership Information Report. This is not a tax report, and it is not filed with the IRS. Instead, it is filed with another agency within the Treasury Department, the Financial Crimes Enforcement Network, also known as FinCEN.
Who Must File?
Generally, any corporation or LLC that registers with the Secretary of State in each state must file. Publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, and tax-exempt entities don’t have to file. “Large operating entities” are also exempt. To qualify as large, the company must employe more than 20 people in the U.S., have over $5M in revenue on their most recent tax return and be physically present in the U.S.
The rest of us must file, and we must file one for each and every corporation or LLC. This is a one-time filing, at least until something changes. The filing must be done by January 1, 2025.
What is Disclosed?
Disclosures include who is filing the report, the company information and information about the beneficial owners. This information generally includes names, trade names, addresses, tax ID numbers (but not social security numbers), birth dates, and a scan of the driver’s license or passport. Beneficial owners either have “substantial control” or own at least 25% of the equity.
Why Is This Being Required?
This is an effort to prevent money laundering. Now, if you’re in the business of money laundering, is skipping a government compliance filing going to deter you? I don’t think so. Sigh.
Where to File
Some have their lawyer, CPA or payroll service do these reports. But you really can do this yourself. It takes about ten minutes once you fight through the software a bit. But make sure you go to the government site, not one of the dozens of independent services and/or scammers who have popped up. The correct site is: https://fincen.gov/boi
Note that his is a .gov website. Don’t be fooled by the .org and other lookalike sites. There is no cost to file.
One Little Hint
For some reason, the Driver’s License and Passport scans seem to upload better when saved as PNG files rather than jpegs, tiffs or other formats. I don’t know why.
Scammers
Services have set themselves up to do this for people. Some are legit and some are not. I don’t know how to tell the difference. Remember, if you choose one of the scammers, you will give them all your personal and business information and provide them with a payment method. They will have everything but your SSN.
Life’s Little Ironies
The federal government’s effort to stop money laundering has spawned a whole new opportunity for scammers!
If you have questions about this report please don't hesitate to reach out to us here at Sweeney Conrad, we would love to help.