New Federal Reporting Requirement for Beneficial Ownership
This notice is regarding new reporting requirements for many businesses, which can include single member and multi member LLC’s, C and S corporations. Starting Jan. 1, 2024, certain businesses will be required to comply with the Corporate Transparency Act (CTA) which includes the filing of Beneficial Ownership (BOI) reports. These reports will be administered by the Financial Crimes Enforcement Network (FinCEN) and establish a database of companies’ beneficial ownership information to be used by law enforcement. This is not an Internal Revenue Service (IRS) issue.
There are significant penalties for missing filing deadlines, including criminal (fines and/or imprisonment) or civil (monetary) penalties. There is a $500 per day penalty, up to $10,000, and imprisonment of up to two years for the WILLFUL failure to timely file initial or updated reports.
Assisting with compliance and or filing of the CTA, including BOI reporting, is not within the scope of the services I provide. It will be your exclusive responsibility to comply with CTA, including its BOI reporting requirements. Information can be found at https://www.fincen.gov/boi. Please consult with legal counsel on additional questions and or concerns regarding how BOI reporting requirements and issues affects your company.
As stated previously, compliance with the CTA, including the BOI reporting applies to most businesses including single member LLCs, which are treated as a disregarded entity for income tax reporting. A disregarded entity does not have a filing requirement with the Internal Revenue Service. You are required to complete this report no later than 12/31/2024.
Finally, I wish to emphasize that I am sending you this letter to make you aware of these new current reporting requirements, associated risks, and suggest you contact legal counsel to assist you with the CTA and related BOI filings for entities that you own or control if you cannot answer questions you may have after visiting the FinCEN website.
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