The Corporate Transparency Act (CTA), enacted as a part of the National Defense Act of 2021, requires the disclosure of the beneficial ownership information (BOI) of certain entities from people who own or control a company. The CTA is not a part of the tax code but instead a part of the Bank Secrecy Act. Because the interpretation of the CTA is considered an interpretation of the law and not the tax code, we recommend that you speak with your attorney to determine if you have any reporting requirements.
Reporting requirements begin on January 1, 2024. The penalties for willful noncompliance with the BOI reporting requirement can result in civil penalties of $500 a day until reporting is resolved and criminal penalties of up to $10,000 and two years of jail. There are specific rules around which entities are required to comply, who is considered a beneficial owner, what type of information should be reported, when companies should file, and if there are any exemptions from the reporting requirements.
If you would like to learn more about the reporting requirements, please visit the Financial Crimes Enforcement Network (FinCEN) website for more details. As with any new reporting requirement, be alert for fraudulent solicitations for information. FinCEN does not send unsolicited requests.