Tax Alert: Beneficial Ownership Information (BOI) Reporting RequirementDo you need to submit a BOI Report for your business?

10/8/2024 - By David Uslan, CPA

This tax alert has been updated from its original posting on January 18, 2024.

The Corporate Transparency Act (CTA), signed into law on January 1, 2021, expanded anti-money laundering laws and created new reporting requirements for certain companies doing business in the United States (U.S.). Effective January 1, 2024, domestic and foreign small businesses created or registered to do business in the U.S. by filing a document with the Secretary of State (or similar office) are required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

The Beneficial Ownership Information (BOI) Report discloses data about the business entity and its significant owners, stakeholders or officers. There are several exemptions, chief among them being the “large operating company” exemption. A large operating company is an entity that (i) employs more than 20 full-time employees in the U.S., (ii) has an operating presence at a physical office in the United States, and (iii) has filed a federal income tax or information return in the U.S. for the previous year demonstrating more than $5 million of domestic sales.

Effective January 1, 2024, all unregulated business entities that have domestic sales of less than $5,000,000 are required to electronically file a Beneficial Ownership Information (BOI) Report. This informational report discloses data about the business entity and its significant owners, stakeholders or officers.

Business entities that are subject to this reporting requirement must file an electronic BOI Report on a timely basis if civil and criminal penalties are to be avoided.

Businesses Created Before January 1, 2024: For business entities that were created or registered before January 1, 2024, the BOI Report must be electronically filed with FinCEN no later than December 31, 2024.
Businesses Created After January 1, 2024: For business entities that are created or registered on or after January 1, 2024, the filing must be made within ninety (90) days of the business entity’s creation or registration.

FinCEN has a Small Entity Compliance Guide and frequently asked questions to guide businesses through the reporting requirements which is available at www.fincen.gov/boi/small-business-resources.

While Saltmarsh does not provide services to file BOI Reports, we have resources available for the new reporting requirement. For further information or questions, contact your Saltmarsh Tax Advisor at (800) 477-7458.

About the Author | David Uslan, CPA

David is a shareholder and technical leader of the Tax & Accounting Services practice at Saltmarsh, Cleaveland & Gund. With more than 30 years of experience, he works with high-net-worth individuals and growth-oriented companies in a variety of industries, including software, real estate, private equity, professional services, technology and creative services. David’s primary areas of experience include federal and state tax compliance, as well as multi-state and federal consulting, including trust and estate planning, merger and acquisitions, accounting method changes and equity and deferred compensation arrangements. Prior to joining Saltmarsh, he held several management positions with national firms KPMG and Ernst & Young and was a shareholder at a large firm based in Portland, Oregon.