To Our Valued Clients:
The Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department that is separate and distinct from the IRS, has implemented new beneficial ownership information (BOI) reporting requirements for certain types of entities that were created in or are registered to do business in the US and for organizers of these entities. These new BOI reporting requirements were established under the Corporate Transparency Act (CTA) and are designed to identify the ultimate owners or the individuals who control companies. While we previously alerted you to this information in our newsletter last year, we are providing you additional information as a reminder of the filing requirements.
The following are some key dates and timing aspects to consider for the reporting requirements that became effective January 1, 2024:
- If you created or registered your company prior to January 1, 2024, you have until January 1, 2025, to report.
- If you created or registered your company in 2024, you must report within 90 calendar days after receiving actual or public notice that your company’s creation or registration is effective, whichever is earlier.
- If you create or register your company on or after January 1, 2025, you must report within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
- Any updates or corrections to BOI that you previously filed with FinCEN must be submitted within 30 calendar days.
There are 23 types of entities exempt from beneficial ownership information reporting requirements, including banks, publicly traded companies, nonprofit organizations, and certain large operating companies. Refer to FinCEN’s website for a complete list.
Reporting beneficial ownership information to FinCEN under the CTA and providing BOI to financial institutions in connection with federal customer due diligence requirements are done for different reasons. Under the CTA’s requirements, entities report information to FinCEN, which then may provide to authorized agencies and institutions to receive this information for several specified purposes, such as combating money laundering and other illicit activities that involve shell companies. Beneficial ownership information collection requirements for financial institutions, in contrast, are primarily intended to ensure that financial institutions know their customers and thus can prevent themselves from being used to facilitate illicit activity. Reporting to FinCEN and reporting to financial institutions are separate, and reporting to one does not fulfill the requirement to report to the other.
Though the information necessary to comply with the CTA requirements may overlap with information that we request from you to satisfy your income tax and other compliance requirements, the CTA reporting requirements fall outside the scope of tax compliance and other permissible services for Snodgrass to provide. As a result, Snodgrass is restricted from assisting or advising you regarding these new rules.
It is strongly advised that you familiarize yourself with these new rules. FinCEN has issued a set of FAQs that explains them. However, these BOI reporting requirements are complex, and we encourage you to consult with your attorney to ensure that you are in compliance with these new requirements.
If you wish to discuss any of the matters in this update in more detail, please contact Danelle Stewart or Charles Marston or call 724-934-0344 (Cranberry Township, PA office) or 304-233-5030 (Wheeling, WV office).
Sincerely,
S.R. Snodgrass, P.C.
d/b/a S.R. Snodgrass, A.C. in West Virginia
