Dear Client:

The Corporate Transparency Act (CTA) is upon us. It takes effect on January 1, 2024, and imposes a new federal filing requirement for most corporations, limited liability companies (LLCs), and other business entities.

Corporations, LLCs, and other entities subject to the CTA are called “reporting companies.” People who form new reporting companies must file a beneficial ownership information (BOI) report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of forming the company.

The owners of reporting companies created before 2024 must also file a BOI report, but they have until December 31, 2024.

Some businesses are exempt from filing—for example, large operating companies with over 20 employees and $5 million in income. There are other, more narrow exemptions as well.

The BOI report must contain the name, the birth date, the address, and an ID number and image of that ID for each “beneficial owner” of the reporting company. These are the human beings who (1) own or control at least 25 percent of the company or (2) exercise “substantial control” over the company.

The BOI report is filed online at a new federal database called BOSS (an acronym for Beneficial Ownership Secure System). There is no filing fee.

Government law enforcement and security agencies will use the data from BOI reports to help combat money laundering, tax evasion, terrorism, and other crimes. It will not be available to the public.

Naturally, people have lots of questions about the BOI report filing requirements—for example:

• Do you have to file a BOI report if you own a single rental property in an LLC? (Yes.)

• Do you have to file 10 BOI reports if you own 10 LLCs? (Yes.)

• Are registered agents responsible for filing the BOI report? (No.)

• Do the self-employed have to file? (No.)

• Do I need to list a street address in the BOI report? (Yes.)

• Do I need to list my Social Security number in the BOI report? (No, but you do have to have an approved ID number, like a drivers license)

• Must I file an updated BOI report if a beneficial owner leaves the company? (Yes.)

• Do I have to list my minor child in a BOI report? (No.)

Currently the final regulations are not completed, so we don’t have all the answers.  We were planning to include the BOI filings with our tax returns.  However, we have been notified by our Software that the Treasury has not yet given tax software companies a roadmap on how to interface with their system and allowing e-filing.  Accordingly, we don’t have a source to provide that service yet.



So… currently we are in a bit of a holding pattern.  We will remind our clients of the requirements and, for those of you that would like us to take care of this reporting, we can do so.  It just won’t be as easy and seamless.  Hopefully the tax software groups will be given access so that this will be an easier process.

Please don’t hesitate to contact us if you have any questions on the above.

Regards,

Larry Filener, CPA

Larry Filener, CPA

Southwest Accounting Pros, LLC