Beneficial Ownership Information Reporting: An Update

By Jason Kendall December 18, 2023

Co-authored by Stanley Rose and Linda Sanborn.

In an article we published a year ago, we shared news of a law that will force most small business owners to participate in a new national Beneficial Ownership Information (“BOI”) registry that, beginning in 2024, will list direct and indirect ownership of most U.S. entities and capture and maintain very specific, personal information regarding each of those owners and certain non-owner executives. We noted that this is not an obscure requirement with limited application. Instead, it will sweep up nearly every small business owner, including those of partnerships, LLCs, S and C corporations, and even sole proprietorships. Stiff penalties can be imposed on those who fail to properly file.

This article supplements our earlier one, and readers who are new to this issue will find useful background and context there that is not regurgitated here. Instead, this article is provided to share some updates from the Treasury Department that have materialized since then, as well as some additional thoughts, as follows.

Recent developments

1. First, these new requirements are no longer on the distant horizon. Depending on an entity’s formation date, the first reports may be due as early as March 31, 2024. This date is 90 days after January 1, 2024, and represents a recent concession. Entities formed in 2024 have 90 days from their formation date to file the Beneficial Ownership Information (“BOI”) paperwork. This is increased from the 30-day requirement that originally applied.
2. The filing forms are not yet available, but will be (well, they must be!) soon.
3. The instructions to the form undoubtedly will explain the mechanics, but entities that must report BOI information for an indirect owner will be able to do so (under the right circumstances) by reporting certain individuals’ FinCEN “identifiers” rather than all of the underlying information for those individuals. In other words, as originally written/interpreted, the Corporate Transparency Act of 2019 that created this reporting requirement suggested that for each person who is reportable on a particular form, all of that person’s required identifying information must be provided (name, SSN, address, etc.). But the use of an “identifier” in lieu of all of that information will be allowed for some indirect owners who have provided detailed information to FinCEN and requested the identifier.

Thoughts on BNN’s role in Beneficial Ownership Information reporting

To be blunt, BNN is unable to fill a role in BOI reporting. We are sharing news of the BOI requirements with our readers solely as a courtesy, and in part because the existence of these rules simply does not seem to be receiving the press that it should for something as wide-reaching as this is. However, these rules are legal requirements rather than tax or accounting requirements, and we are unable to provide specific guidance without drifting into provision of legal advice – something accountants cannot do. The Treasury Department has multiple divisions, including the Internal Revenue Service, whose matters fall into our wheelhouse. But the BOI rules are part of Treasury’s FinCEN (Financial Crimes Enforcement) division, which involves legal analysis – not tax or accounting.

Please understand that we want you to be informed, and that explains the time and effort that went into sharing these articles. But we will be unable to help you complete any BOI paperwork or even determine whether the BOI requirements apply to you at all. We recommend consulting your legal counsel for that assistance.

For more information, please contact Stanley Rose, Jason Kendall, Linda Sanborn or your BNN tax advisor at 800.244.7444.