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03/13/2024
Update on the new Beneficial Ownership Information (BOI) Reports
Update: On March 1, 2024, a federal district court ruled the Corporate Transparency Act (CTA) unconstitutional, preventing the Department of Treasury and FinCen from enforcing the BOI reporting against the plaintiffs. The Government filed an appeal on March 11, and clarified that the BOI filing requirement remains in effect for all entities other than parties to this specific court’s injunction. The FinCen BOI reporting portal is currently open and accepting filings.
Background: In 2023, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued updated rules relating to beneficial ownership reporting requirements. Essentially, these rules require most legal entities created in, or registered to do business in, the United States to report information about their beneficial owners (BOI Report).
Entities created or registered to do business in the U.S. prior to Jan. 1, 2024, and that are subject to these rules, are required to file their initial BOI Report by Jan. 1, 2025. Entities created or registered in 2024 will have 90 calendar days after receiving notice of the company’s creation or registration to file its initial BOI Report.
What does CohnReznick think?
Most entities – including corporations, LLCs, and partnerships – organized in the U.S. may be required to file a BOI Report beginning Jan. 1, 2024. Despite the recent ruling, and in light of FinCen’s subsequent appeal and further clarification of the BOI report filing requirements remaining in effect, we recommend establishing a reporting plan for your existing entities to help ensure compliance by the deadline, and plan for reporting with respect to new entities within 90 days of formation.
As there are no accounting figures that are to be reported on these forms, CohnReznick cannot provide services with respect to filing BOI Reports. Unlike FBAR filings (FinCEN Form 114), for which the IRS was delegated compliance and enforcement authority by the Treasury, the IRS has no role (compliance or enforcement) with respect to the FinCEN beneficial reporting forms. Accordingly, we recommend contacting legal counsel for assistance with this process.
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Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.