As previously stated, beginning January 1, 2024, most small business owners—e.g., corporations, limited partnerships, limited liability companies (LLCs), and business trusts—must report the beneficial owners to FinCEN to include their names, date of birth, address, and a unique identifier number from a recognized issuing jurisdiction (e.g., Passport or Driver’s License), with a photo of that document. Failure to timely comply, timely update, and/or NOT provide the correct information, will result in fines, per violation, of $500 to $10,000 and imprisonment for up to two years. By the time you are notified by FinCEN of your noncompliance, the aggregated penalties may be significantly higher.
For businesses and LLCs incorporated and formed BEFORE January 1, 2024, we have until January 1, 2025, to report the beneficial owners to FinCEN. HOWEVER, for businesses formed on January 1, 2024, and thereafter in 2024, you must report within 90-days; and within 30-days beginning January 1, 2025. As previously recommended, DO NOT incorporate or form any LLC in 2024 until we understand the ramifications of this unconstitutional law.
On March 11, 2024, the U.S. Justice Department (DOJ) appealed a federal court decision that held the BOI Reporting Requirements unconstitutional. The U.S. Court of Appeals for the Eleventh Circuit has scheduled oral arguments for the week of September 16, 2024. FinCEN has announced that it will not enforce the BOI Reporting Requirements against the plaintiffs: the National Small Business Association (NSBA), its 65,000 members and an Alabama businessman. HOWEVER, as of this date, ALL the rest of us are expected to comply with the BOI Reporting Requirements or face stiff penalties, including prison time!
Other lawsuits have been filed, including one by the Small Business Association of Michigan, which has approximately 32,000 members.
“The AICPA and over 50 state CPA societies have written to the Treasury secretary and the director of the Financial Crimes Enforcement Network (FinCEN) asking that enforcement of beneficial ownership information (BOI) reporting requirements be suspended until one year after court cases have been resolved.” Martha Waggoner, Journal of Accountancy (4/8/2024)
FinCEN has prepared a 56-page Small Entity Compliance Guide, BOI Beneficial Ownership Information Reporting Requirements. The online reporting form is 4-pages and increases by one-page for each beneficial owner; and the instructions to complete the Report are 21-pages. Not only does this violate our constitutional rights under the Fourth and Fifth Amendments, the compliance requirements, if upheld as constitutional, are fraught with substantial risk.
In 2016, I explained why the Bank Secrecy Act of 1970, strengthened by the USA Patriot Act of 2001, is unconstitutional. The same arguments apply to the BOI Reporting Requirements. Get a copy of my book from Amazon and pass it along. Our Right to Privacy-Hijacked by Government: The U.S. Government Consistently Violates "the supreme law of the land," the Constitution of the United ... of America Revised and Updated.
As of this writing, if you have formed a corporation or limited liability company on or after January 1, 2024, you need to continue to file the BOI reports within 90 days from the date of incorporation or formation.
For entities formed prior to 2024, we have until January 1, 2025, so it makes sense to wait and hopefully, FinCEN will ultimately postpone the BOI filing requirements until after the various court cases have been resolved.
In the meantime, you may want to contact your Senators and U.S. Congressional Representative. Ask them to postpone the implementation of the beneficial ownership information (BOI) reporting requirements until the various court cases are resolved.
Dum Spiro Spero—While I breathe, I hope.
Slàinte mhath,
Robert (Mike) G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.