
According to the Journal of Accountancy, the Financial Crimes Enforcement Network (FinCEN) has received only a tiny portion of the anticipated 32 million beneficial ownership information (BOI) reports, with less than a couple of months for most small businesses to file these reports. FinCEN's beneficial ownership operations and innovation chief Phil Lam stated this in an Nov. 7 AICPA Town Hall.
The Journal reported that new businesses formed in 2024, which have tighter deadlines to file reports than older firms, comprise many of those, noted Lam. "This past week, we've crossed over 6.5 million filings," he stated. “Now, this is tracking more closely towards new businesses that have been created this year." However, Lam did not say precisely how many filings are from businesses created in 2024.
Under the Corporate Transparency Act, P.L. 116-283, which Congress passed in 2021 as an anti-money-laundering measure, reporting companies should disclose the identity and information about beneficial owners of the entities. For new entities incorporated after Jan. 1, 2024, reporting companies are required also to disclose the identity of "applicants." The Journal explained that they are defined as any individual who applies to form a corporation, limited liability company or other similar entity.
In terms of deadlines, in Nov. 2023, FinCEN
issued a final rule extending the deadline for reporting companies created or registered in 2024 to file BOI reports. They now have 90 calendar days from receiving actual or public notice of their creation or registration, becoming effective to file their initial reports. FINCEN extended the deadline from 30 calendar days to give reporting companies created or registered in 2024 more time to become familiar with the guidance and educational materials to resolve questions that may arise while completing their initial BOI reports.
However, FinCEN kept the deadline for reporting companies created or registered before Jan. 1, 2024, which will have until Jan. 1, 2025, to file their initial BOI reports. Reporting companies created or registered on or after Jan. 1, 2025, will continue to have 30 calendar days to file their initial BOI reports.
FinCEN offered certain small businesses impacted by hurricane damage an additional six months to file BOI reports in October. This includes updates or corrections to prior reports, the Journal said.
FinCEN extended the filing deadlines for reporting companies whose original reporting deadline starts a day before the date the specified disaster began and ends 90 days after that date and is in an area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance and by the IRS as eligible for tax filing relief.
In early October, the
AICPA called for extensions for BOI reporting by victims of major disasters. However, the Journal reported that the AICPA wanted more. Several AICPA members "would have liked to have seen a broader scope of relief," Melanie Lauridsen, vice president of Tax Policy & Advocacy at AICPA, said to Lam.
In response, Lam stated that FinCEN wanted to be "thoughtful and mindful" regarding offering the relief so that the process could be repeated. He noted that it followed what the IRS and FEMA had done. FinCEN then settled on the time frame beginning with when the storms started instead of including businesses with reports due Jan. 1, 2025, in the relief, the Journal reported.