FinCEN Compliance

Texas Court Update, Dec 3, 2024

Federal Court Enjoins Enforcement of the CTA Nationwide

There is still uncertainty on this issue.

The Court held that the CTA—which would have required an estimated 32.5 million companies in the United States as of January 1, 2024, to submit sensitive information regarding their “beneficial owners” (BOI) to the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) by January 1, 2025—was likely unconstitutional and that its implementation would irreparably harm reporting companies if they were forced to comply.

The Court’s decision will likely not be the final word on the CTA’s enforceability. To begin, the Court entered only a preliminary injunction, which it could theoretically reconsider at some point in the future.

See National Law Review article: https://natlawreview.com/article/texas-federal-court-blocks-corporate-transparency-act-halts-nationwide-enforcement

FinCEN - Beneficial Owners Compliance

DISCLAIMER: The information provided on this page is intended to guide people to become compliant on a new issue and avoid penalties. This compliance measure is not related to any tax preparation service that I provided, nor is it intended to suggest continued legal service that I provided in the past. Just trying to help people out to get compliant! Hopefully, this content helps - I provide some links to the government websites that probably confuse many, but is supposed to answer questions.

*** My office will NOT do the filing for you. Good luck! ***

New FinCEN compliance rules. The Reporting Rule requires certain entities to file beneficial ownership information (BOI) reports (referenced in this Guide as BOI reports or reports) to FinCEN. Reports contain information about the entity itself and two categories of individuals:

1. Beneficial owners
2. Company applicants

Your FinCEN Resource: This FinCEN published guide answers many of your questions regarding this new reporting requirement. Compliance for BOI is not satisfied by your annual income tax return, buy rather a separate system maintained by FinCEN.

What Does the Guide Include?

1. Does my company have to report its beneficial owners?

a. what's a reporting company

b. is my company exempt

c. what happens if my company doesn't report

2. Who is a beneficial owner of my company?

a. identify your company's beneficial owners

b. what is substantial control

c. what is an ownership interest

d. who qualifies for an exemption

3. Does my company have to report its company applicants?

a. is my company required to report its company applicants

b. who is the company applicant of my company

4. What specific information does my company need to report?

a. what information should I collect

b. what is a FinCEN identifier

5. When and how should my company file its initial report?

a. when should my company file its initial BOI report

b. how does my company file a BOI report

6. What if there are changes to or inaccuracies in reported information?

a. what should I do if previously reported information changes

b. what should I do if I learn of inaccuracies in a report

c. what should I do if my company becomes exempt after already filing a report

https://www.fincen.gov/boi/small-entity-compliance-guide

When Do I Report? FinCEN began accepting reports on January 1, 2024.

1. If your company was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.

2. If your company is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice

that your company’s creation or registration is effective, whichever is earlier.

3. If your company is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or

public notice that its creation or registration is effective.

4. Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.

FinCEN BOI e-File Reporting Website:

https://boiefiling.fincen.gov/

What is a FinCEN ID for individuals?

A FinCEN ID is a unique identifying number issued to an individual by FinCEN. Although there is no requirement to obtain a FinCEN ID, doing so can simplify the reporting process.

What does a FinCEN ID do for individuals?

An individual beneficial owner or company applicant's FinCEN ID can be reported instead of required information about that individual on the reporting company's Beneficial Ownership Information Report (BOIR) submitted to FinCEN.

Apply for your FinCEN ID - very simple:

https://fincenid.fincen.gov/landing

New FinCEN compliance rules

FinCEN BOI - Main Points

1. Even if you aren't actively using the business, if the corporation or LLC is active with the state you created it in, you need to file Beneficial Ownership Information (BOI).

2. The new requirement is MANDATORY and must be completed by DECEMBER 31, 2024. Punitive fines will be imposed if you are not compliant.

3. You will need information of ALL BENEFICIAL OWNERS, who are individuals that exercises substantial control over the company or owns 25% or more of the company. Names, address, dates of birth and identifying numbers from an acceptable form of identification, such as an unexpired drivers license.

4. My office will not do the filing for you. The information you find on this page is meant to help and guide you.

FinCEN - BOI - Helpful Video

Please... and thank you 😊

Filing is quick, secure, and free of charge. It is not an annual requirement—unless a company needs to update or correct information, it only needs to file once. FinCEN expects that most companies will be able to file without the help of an attorney or accountant, and that the filing process for those with simple ownership structures may take 20 minutes or less. Companies that existed before 2024 have until January 1, 2025 to file, while companies created or registered in 2024 must file within 90 days of receiving creation/registration notice. More information, along with FinCEN’s E-Filing System, is available at https://www.fincen.gov/boi.

Shah Law Firm, PLLC