Breaking CTA News

In a last-minute ruling, business owners receive clarity on their requirement to file Beneficial Ownership Information Reports with FinCEN just as the Holiday Season kicks off.

UPDATE 12/23/24 8:48pm MT:

On December 23, 2024, the Fifth Circuit U.S. Court of Appeals put a “Stay” on the recent U.S. District Court injunction in the Texas Top Cop Shop v. Garland et. al. case. On top of it all, late in the day, FinCEN issued filing deadline relief until January 13, 2025 for most entities.  This means that for approximately 90% of all legal entities (LLCs, corporations, etc.), there is a January 13, 2025, due date for filing a FinCEN Beneficial Ownership Information Report.

As a result of the stay, the majority of legal entities (approximately 90%, including LLCs, corporations, and others) must now file a FinCEN Beneficial Ownership Information Report by the January 1, 2025, deadline.

As of December 1, FinCEN had received only 9.5 million of the 32.6 million required Beneficial Ownership Information reports for entities existing as of January 1, 2024, representing a mere 25% compliance. For the remaining 75% of reporting companies that are non-compliant by year-end the stakes are high and the Penalties are Steep. With just a few days before the deadline, this means all-hands-on-deck!

There’s still hope – if you’re a beneficial owner of one of the remaining 23+ million entities left to file, set aside your eggnog, and here’s what we suggest:

1. Obtain FinCEN IDs for Key Owners 

2. Engage a Team to Help You – If you’re not willing or able to perform these filings yourself, consider gaining an expert team – especially if you have a complex, multi-tiered entity structure. Email us at cta@freidel.tax if you’d like our help – as of the time of publishing, we are taking select clients, and space is limited. If it comes down to it, you’re absolutely able to file the Beneficial Ownership Information reports at https://boiefiling.fincen.gov/.

3. Obtain and Document Key Entity Information – The definition of a “Beneficial Owner” includes is not always straightforward. Document all available information such as reporting and entity structures, bylaws or operating agreements, and review functional roles within your company to support your determination of your reporting company’s Beneficial Owners.

4. Account for Key Complexities – Be sure to consider additional key complexities when filing your BOIR, including: 

   1. Community property rules 

   2. Tiered ownership structures 

   3. Complex ownership structures (complex capital structures, waterfall equity calculations, etc.) 

   4. Series LLCs 

   5. Trusts 

   6. Ownership or control persons that are unresponsive to data requests 

5. Obtain Beneficial Owner Information – Included with each report will be either the FinCEN ID number for each Beneficial Owner, or the following information: 

   1. Full legal name 

   2. Date of Birth 

   3. Residential Address 

   4. A unique identifying number from an acceptable identification document (e.g. passport, driver’s license) 

   5. An image of the identification document

6. Monitor for Developments – We anticipate additional developments in the weeks ahead, including FinCEN guidance and possibly changes to the law by a new Congress next year. However, given the condensed timeline before the deadline, we strongly suggest moving forward urgently. Recent history has clearly illustrated that future changes cannot be relied upon. It’s imperative to comply with the rules as currently in force.