Tax Byte
FinCEN Finalizes BOI Reporting Rule, Digs Heels In On Limited Relief
Treasury’s Financial Crimes Enforcement Network (FinCEN) has finalized its latest beneficial ownership information (BOI) reporting rule, digging its heels in on providing limited relief for certain entities while refusing industry calls to do more.
FinCEN first proposed the now final rule last September. Entities created or registered in 2024 now have 90 days to file their initial BOI reports, instead of 30 days. Companies created or registered in 2025 or later still have only 30 days to submit initial BOI reports under the final rule, and those created or registered before 2024 have until 2025.
Too Bad, So Sad
However, industry advocates and stakeholders have been calling upon FinCEN to offer more relief for its initial and controversial BOI reporting rule issued September 30, 2022, which implements Section 6403 of the Corporate Transparency Act (CTA) (P.L. 116-283). The CTA, essentially an anti-money laundering law, is aimed at those seeking to conceal their ownership of corporations, LLCs, or other entities in the U.S. to facilitate money laundering, tax fraud, and other illegal acts, but small businesses are expected to feel the brunt of the reporting burden.
Under the latest final rule, FinCEN declined to further extend or apply the temporary 90-day reporting deadline to all companies created after January 1, 2024, as some stakeholders requested. The preamble to the final rule states that FinCEN expects the public to become increasingly aware of the BOI reporting requirements through its outreach efforts as 2024 progresses and therefore believes the required 30-day timeline is best.
“Considering the balance that FinCEN must strike among reducing burdens on reporting companies, making the BOI database highly useful, and complying with the directive set out in the CTA that companies must report BOI ‘at the time of formation or registration,’ FinCEN believes that the 30-day timeframe is appropriate for reporting companies that come into existence or are registered after 2024,” the preamble states.
New Money Summit
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