The Financial Crimes Enforcement Network (FinCEN) estimates that entities seeking the beneficial ownership information (BOI) of companies required to report that information by the 2021 Corporate Transparency Act will spend over 8.7 million hours filling out paperwork in the first year of the requirement, the Journal of Accountancy reported.

FinCEN included the estimate as part of a 30-day notice published in the Federal Register. The notice seeks comments on the information to be collected from certain authorized recipients requesting access to BOI. Comments are due by Aug. 22

In the notice, the Department of the Treasury states, “FinCEN estimates that during year 1 the annual hourly burden will be 8,743,781 hours. In year 2 and onward, FinCEN estimates that the annual hourly burden will be 3,616,964 hours. The annual estimated burden hours for State local, and Tribal entities and [self-regulatory organizations} is 2,268,789 hours in the first year, and 1,699,612 hours in year 2 and onward.”

FinCEN also estimated that 15,934 entities will seek access to BOI, and that the vast majority of them—15,716—will be financial institutions. It estimates that the rest will consist of  215 state, local, and tribal agencies and three self-regulatory organizations.

The notice reports that self-regulatory organizations “cannot make BOI requests to FinCEN under the BOI Access Rule, but can receive BOI via redisclosure from other entities in some circumstances if they fulfill certain requirements.” An example of a self-regulatory organization is  the Financial Industry Regulatory Authority (FINRA), a not-for-profit organization authorized under the federal securities laws and registered with the Securities and Exchange Commission (SEC).

The 30-day notice comes after a 60-day notice on BOI requests that FinCEN previously issued for public comment in January with regard to  the Beneficial Ownership Information Access and Safeguards Rule.

In March 2023,  FinCen issued regulations for initial BOI. The regulations “require many corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company—to FinCEN,” the guidance states.

“The Corporate Transparency Act, through its beneficial ownership reporting requirements, provides the historic opportunity to unmask shell companies and protect the U.S. financial system from abuse by money launderers, drug traffickers, sanctioned oligarchs, and other criminals,” said Himamauli Das, acting director of FinCEN at the time. “We are committed to making this transparency process as simple as possible, particularly for small businesses who may have never heard of or interacted with FinCEN before.”

The Corporate Transparency Act authorized government agencies, financial institutions, and their regulators to obtain BOI under certain specified circumstances for national security and law enforcement purposes.

For entities incorporated after Jan. 1, 2024, reporting companies must—in addition to disclosing the identity and information about their beneficial owners—also disclose the identity of "applicants," defined as any individual who files an application to form a corporation, limited liability company or other similar entity.