Caution: This explanation is general in nature and should not be used for specific planning.
Beneficial Ownership Information Reporting Penalty Increase
As if a $500 per day penalty were not large enough, the legislation passed by Congress and signed by the President adjusted the penalty for inflation. The Financial Crimes Enforcement Network (FinCEN) included the inflation adjusted civil penalty in its final rule which has been posted in the Federal Register. The civil penalty has been increased to $591 per day as of January 25, 2024.
Exceptions to Reporting
There are 23 exceptions to the Beneficial Ownership Reporting requirements. These exemptions generally apply to highly regulated businesses. Two of the exemptions that may be of interest to you are the “Large Operating Company” (Exemption #21) and the “Inactive Entity” (Exemption #23). Both of the exemptions as defined in Version 1.1 December 2023 “Small Entity Compliance Guide” of the FinCEN are attached to this email. Use these attachments only as a guide. You should always go to the FinCEN webpage to get the most updated information before making a decision about beneficial ownership reporting and whether an exemption applies.
If you have questions about these new reporting rules and how they affect your business, another source you should reference is FinCEN’s Small Entity Compliance Guide and Frequently Asked Questions to help guide your business through the reporting requirements. These are available at https://www.fincen.gov/boi/small-business-resources.
BOI reports must be filed electronically. FinCEN’s e-filing portal, available at https://boiefiling.fincen.gov/, provides two methods to submit a report: (1) by filling out a web-based version of the form and submitting it online, or (2) by uploading a completed PDF version of the BOI report. Some third-party service providers may also offer the ability to file the BOI report through their software. The person who submits the BOI report will need to provide their name and email address to FinCEN. There is no fee for filing the report.
Beneficial Ownership Information reported to FinCEN is not financial information and Bull & Associates does not file BOI reports or monitor client transactions to determine their reporting obligations or timely filing of BOI reports. Your Company should establish procedures to obtain and track the necessary information on a contemporaneous basis in order to comply with the reporting requirements regarding both the initial report and updated reports.