November 7, 2024

Hello all clients of The Tax Authority, P.C.

As you may or may not know there is a new reporting rule for most business owners.  It is called the BOI (Beneficial Ownership Information) report.  It may not apply to you if you do not own a business, but I felt it important enough to send to everyone.

This email blast is your knowledge base on filing your BOI (Beneficial Ownership Information) report.

Background

Effective January 1, 2024 the Corporate Transparency Act (CTA) requires certain entities, including many small businesses, to report information about the individuals who ultimately own or control them, also known as “beneficial owners”, to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury.

What companies are required to file the BOI with FinCEN

There are two types of reporting companies

            Domestic reporting companies are corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.

            Foreign reporting companies are entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United State by filing of a document with a secretary of state or similar office.

In English, this means if you file an annual report to your state (here in Michigan we file our Michigan Annual Report with LARA) you are a reporting company.  If you are simply a sole proprietor you do not need to file a BOI.

What entities are exempt

There are 23 types of entities that are exempt from the reporting requirements.  These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

The following table summarizes the 23 exemptions:

For more information on each of these exemptions please reference the Small Entity Compliance Guide by clicking here  https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf

When to file

If your company was created or registered prior to January 1, 2024, you have until January 1, 2025 to report.

If your company was created or registered in 2024, you must report within 90 calendar days after receiving actual notice that your company was created.

If your company is created on or after January 1, 2025, you must report within 30 calendar days after receiving actual notice that your company was created.

Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 calendar days after the date of the change.  Some examples of a change are—a change to your company’s address, a change in beneficial owners such as a new CEO, a change to a beneficial owner’s name, address or driver’s license/passport as it was used to identify you in the original filing.

I know a lot about all of you but I may not know it within 30 days of the change.  It is due to this that I will not be preparing your BOI for you. 

Who is a “Beneficial Owner”

Any individual who directly or indirectly:

            Exercises substantial control over a reporting company

OR       

            Owns or controls at least 25 percent of the ownership interests of a reporting company

Is this a mandatory filing

Yes, willful failure to report complete or updated beneficial ownership information to FinCEN may result in a civil or criminal penalties, including civil penalties up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000.  Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure.

Enough of the rules, let’s get to the filing.

The rest of this blast will guide you thru the process with a few screen shots as needed.

Start at the proper website www.fincen.gov and click on File your Report Now button as referenced by the blue arrow below.

Then click on the Get Started button in the top box labeled BOI E-Filing referenced by the blue arrow below.

There are 3 ways to file, I chose the File Online BOIR option by clicking on the Prepare & Submit BOIR box as referenced by the blue arrow below.

This will take you to the following page

From here I will simply discuss the choices by the question #

#1 We all will choose a. Initial report

#2 The date will auto fill

Click Next

At any time if you have a question click on the Need help down arrow and additional information will appear as referenced by the next blue arrow.

#3 I chose to request to receive a FinCEN ID as it can make it easier to file BOIR’s for individuals who are       beneficial owners for multiple reporting companies.

#4 Leave it blank

#5 Enter your full and complete company name as it appears on your Articles of Incorporation or Articles of Organization, whichever applies.

#6 If you have a trade name or dba enter it here exactly as it was issued to you

#7 I expect most of you will choose Employer Identification Number (EIN)

#8 Enter the number based on your choice in #7 with no spaces

#9 Leave it blank

Click Next

#10 a. We will all choose United States of America

1. Choose the state your company was created in, I expect most of you will choose Michigan
2. and d. Leave blank

#11-#15 Enter the company information

Click Next

#16 Check this box if you have been in existence prior to January 1, 2024 and a pop-up box will appear, click Yes, click Next and you will proceed to Part III.

IF your entity was newly created in 2024 do NOT check this box and you will complete the rest of Part II

Click Next

#35 Leave blank unless it applies to you

#36 Leave it blank

#37 Leave it blank unless you feel you are exempt based on one of the 23 exemptions discussed earlier.

#38-#47 Enter the beneficial owner info, this is you the owner

#48 Choose what document you want to upload to verify yourself, driver’s license is what I chose but you may want to use a passport as it may have a longer expiration date.  As mentioned above, when this item changes you are required to file an updated BOI.

#49 Enter the number from the document you chose in #48

#50 a. and b. Enter appropriate info from document you chose in #48

1. and d. Probably blank

#51 Scan the document you chose in #48 and upload it here

Click Next

Enter your email along with your First and Last Name, click on I agree, click on I am a human and complete the challenge.

You made it, click on Submit

Be sure to print the Submission Status Confirmation page and download Transcript

I hope this helped and the only thing you need to do is come back and make a change if/when something changes as referenced above.