New for 2024 and NOT to be Ignored: Beneficial Owner Information Report

Do you own or manage a small LLC or corporation? You will likely have to file a Beneficial Ownership Information (BOI) report with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FINCEN) by the end of 2024. If you neglect this filing, the penalty is $500 per day for late filing up to a maximum $10,000 fine and possible imprisonment if you willfully disregard filing this report. 

In 2021 Congress passed the Corporate Transparency Act (CTA) requiring the BOI report that was designed to make it harder for bad actors to benefit from money laundering and other financial crimes by hiding behind these entities. This reporting requirement went into effect on January 1, 2024. 

Failing to file the Beneficial Ownership Information (BOI) report on time or accurately can have serious legal consequences. For business owners, especially those managing small LLCs or corporations, the risk of facing steep fines or even imprisonment should not be taken lightly. Criminal defense attorneys are increasingly seeing cases where seemingly minor oversights lead to major legal challenges. Understanding the nuances of compliance and being proactive about filing can help protect your business and personal freedom.

When mistakes happen, it’s crucial to have a legal team that understands both business regulations and criminal defense. Bryan Alfaro Law has extensive experience navigating complex compliance issues and defending clients facing charges related to financial reporting violations. Whether it’s a missed deadline or an alleged willful failure to file, skilled representation can make a difference in mitigating penalties and preserving your livelihood.

In addition to potential criminal charges, a BOI reporting failure can damage your professional reputation and put your business at risk. Taking preventive measures by consulting a knowledgeable attorney before issues arise can save you from costly consequences. Don’t wait until fines and accusations pile up—act now to protect yourself and your business interests.

Who is required to file? Most small businesses organized as a LLC or corporation with less than 21 full-time employees and less than $5 million of sales or gross receipts are required to file the BOI report. Who is not required to file the BOI report? There are 23 exemptions to filing, but mostly tax-exempt entities, inactive entities and large companies. This also means that if your small business was created by only filing a Doing Business As (DBA) with your county, then you are not considered a reporting entity.  

If you create a new LLC or corporation in 2024, you have 90 days to file this report. Once you file your first BOI report, if you have any changes, such as an address change or a renewed driver’s license, you will need to file an updated report within 30 days. The penalties are in force if the updated report is late. 

The Financial Crimes Enforcement Network has a webpage on all the requirements for this BOI report. It can be accessed at www.fincen.gov/boi. There is a brochure and a Small Business Compliance Guide (57 pages) you can download. The U.S. Treasury Department expects most owners and managers of reporting companies to file this report on their own. 

While no one looks forward to the time and effort in having to file this report, one can see the penalties for ignoring to do so. If you own or manage an LLC or corporation, or multiple LLCs and corporations, if you have not already filed your first BOI reports, make sure to speak with your accountant or attorney this tax season about a timeline in completing the filing of this report for each one of your entities that is required to file. 

Peter VanderWoude, MS, CPA, CGMA
EQUUS ADVISORS
Accounting and Tax Professionals
www.EquusCPA.com – 607.756.5691 / 607-275-5700