Treasury Extends BOI Deadline Alert
The deadline for millions of small firms to submit a new form called a Beneficial Ownership Information report has been postponed by the U.S. Treasury Department until January 13, 2025.
At first, the Treasury mandated that numerous companies submit the report by January 1 to the organization’s Financial Crimes Enforcement Network, or FinCEN. Penalties for noncompliance might be more than $10,000.
Legal challenges to the new reporting requirement under the Corporate Transparency Act are the cause of this delay.
According to federal estimates, the rule applies to approximately 32.6 million organizations, including limited liability firms, certain corporations, and others.
According to FinCEN, noncompliant businesses and owners might be subject to civil penalties of up to $591 per day, adjusted for inflation. They may also be subject to two years in prison and criminal fines of up to $10,000.
Many small enterprises are exempt, though. For instance, companies with more than 20 full-time employees and gross revenues of more than $5 million might not be required to submit a report.
Why the BOI reporting obligation was postponed by Treasury
In response to a recent court decision, the Treasury postponed the compliance date.
On December 3, a federal court in Texas ordered a nationwide preliminary injunction, preventing FinCEN from implementing the regulation for the time being. On Monday, though, the 5th U.S. Circuit Court of Appeals overturned that injunction.
The FinCEN website states, “We have extended the reporting deadline because the Department of the Treasury acknowledges that reporting entities may require additional time to comply given the period when the preliminary injunction had been in place.”
A request for comment from CNBC regarding the total number of companies that have submitted a BOI report to date was not answered by FinCEN.
However, some research indicates that not many have.
As of Dec. 1, FinCEN furnished the office of Rep. French Hill, R-Ark, with figures showing that the federal government had received about 9.5 million filings. About 30% of the expected total is represented by that amount.
Hill has demanded that the 2021 Corporate Transparency Act, which established the BOI requirement, be repealed. CNBC received the data from Hill’s office.
Some companies are not required to file a BOI.
There is no yearly necessity to file the BOI. To amend or correct information, businesses only need to complete the form again.
Similar data is already provided by a vast number of exempt enterprises, including public utilities, banks, credit unions, tax-exempt institutions, and large corporations.
Depending on when they were established, businesses have varying compliance deadlines.
For instance, according to FinCEN, individuals who were created or registered prior to 2024 have until January 13, 2025, to submit their first BOI reports. They have 30 days to submit a report if they do so on or after January 1, 2025.
According to Stipano, further court decisions are probably in the works that could affect reporting.
One reason is that the 5th Circuit, which has not yet issued a formal ruling regarding the constitutionality of the Corporate Transparency Act, is still embroiled in litigation.
He added, “Multiple jurisdictions have seen judicial cases challenging the law, and these actions may eventually reach the Supreme Court.” It is now unknown if the Trump administration would stick with the government’s stance on these matters.
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