BOIR FAQs

Most small businesses are subject to the mandatory filing requirement. After some legal back-and-forth at the end of 2024/beginning of 2025, the new deadline for companies formed on or before February 19, 2025 is March 21, 2025.

What does "beneficial ownership" mean?

Beneficial ownership refers to individuals that directly (or indirectly) own and/or control a company. More specifically, a beneficial owner is someone that has substantial control over a business or who owns at least 25% of its shares.

Where did BOIR come from?

The BOIR requirement comes from the bipartisan Corporate Transparency Act (CTA) passed by Congress in 2021. This law created a new beneficial ownership information reporting requirement as part of the U.S. government’s efforts to "make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures." The law became effective on January 1, 2024. Businesses are now required to submit this information in the form of a Beneficial Ownership Information Report (BOIR) to FinCen (Financial Crimes Enforcement Network). FinCen is a bureau of the U.S. Department of the Treasury that works to detect and prosecute financial crimes.

What companies need to file a BOIR?

Any business entity created by filing documents with a state or similar office must report. This includes corporations, limited liability companies (LLCs), and more - unless the entity is exempt.

What companies are exempt from filing a BOIR?

Common exempt companies include sole proprietorships (which does NOT include single-member LLCs), tax-exempt organizations, and companies with at least 20 full-time employees and at least $5 million in annual gross receipts. Other exemptions include companies that are already regulated such as banks and credit unions, investment companies, and insurance companies. A company called FincenFetch has an exemption tool to help businesses check if they qualify for a BOI report exemption: https://www.fincenfetch.com/boi-report-exemptions/

What kind of information is required on the BOIR?

Businesses will need to provide details about the business such as the company’s name, address, formation jurisdiction, and EIN. For each “beneficial owner” legal name, birthdate, address, and ID details must be provided. An identifying document for each beneficial owner (like a State-Issued ID, Driver's License, Passport) must be submitted with the report.

When is the BOIR due?

Companies formed before January 1, 2024 must file the initial beneficial ownership information report by January 1, 2025. (Companies started in 2024 have 90 days from the date of formation to file. Starting in 2025, new companies must file within 30 days of formation.)

How often do businesses need to file a BOIR?

After the initial report is filed, the report must be updated within 30 days of a change in beneficial ownership.

How can businesses file the BOIR?

Businesses can file FOR FREE directly on FinCen's website: https://boiefiling.fincen.gov/. (Click the "File BOIR" button). As of November 2024, FinCen's website doesn't have a login function for setting up an account there. Therefore there is no way to re-access a submitted BOIR to update the report. It also does not allow for save-and-return when completing the form; so it will need to be filed in one sitting. It may be very helpful to review FinCen's instructions PDF before beginning: https://boiefiling.fincen.gov/resources/BOIR_E-File_PDF_Quick_Reference_Guide.pdf. Information to have on hand before starting the form includes the company EIN and an image of the ID to upload for each beneficial owner. BE SURE to download the transcript on the web page that opens when you submit the BOIR, otherwise you will not have a record of what was submitted.

Besides filing directly with FinCen, are there any other ways to file the BOIR?

Some tax preparation firms are offering to help clients with this service. This may be particularly helpful if the ownership structure is complicated. There are also authorized IRS providers that have websites where businesses can file for a fee. If opting to file on an alternative website to FinCen's site, be sure that it is a legitimate and IRS authorized company.

Are there scams out there regarding BOIR?

Yes. As of November 2024, FinCen reports the following fraudulent attempts to solicit information:

• Correspondence that references a “Form 4022” or “Form 5102” is fraudulent. FinCEN does not have a “Form 4022” or a “Form 5102.” Do not send BOI to anyone by completing these forms.

•  Correspondence or other documents referencing a “US Business Regulations Dept.” This correspondence is fraudulent; there is no government entity by this name.

• Please be on the lookout for anything that may indicate correspondence you receive is fraudulent. For example, be cautious of any of the following:

• Correspondence requesting payment. There is NO fee to file BOI directly with FinCEN. FinCEN does NOT send correspondence requesting payment to file BOI. Do not send money in response to any mailing regarding filing your beneficial ownership information report that claims to be from FinCEN or another government agency.

• Correspondence that asks the recipient to click on a suspicious URL or to scan a suspicious QR code. Those e-mails or letters could be fraudulent. Do not click any suspicious links or attachments or scan any suspicious QR codes.

• Correspondence regarding penalties. FinCEN does NOT send initial correspondence regarding CTA penalties via e-mail or over the phone. Do not submit payments via phone, mail, or websites as requests/directions to do so are fraudulent.

Are there penalties for not filing?

Yes, according to FinCen’s website - “As specified in the Corporate Transparency Act, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation. As of the time of publication of this FAQ, this amount is $591. A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.”

What’s the best way to get more information about BOIR?

FinCen’s website is a great source of information - especially the BOIR FAQ page:

https://www.fincen.gov/boi-faqs#A_1

Businesses should also consult with the company tax preparer for more information.