New Reporting Requirement Set To Impact Millions of Small Businesses
AAFCPAs would like to make clients aware of the new Beneficial Ownership Information (BOI) reporting requirement set to begin January 1, 2024. This new reporting requirement, part of an anti-money laundering initiative enacted through the Corporate Transparency Act in 2021, requires that millions of small businesses report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department. Two bills titled the Protecting Small Business Information Act of 2023 seek to delay this rule to provide additional time for small businesses to learn about and better understand their new reporting requirements.
As of now, all existing small businesses formed before December 31, 2023 must submit a filing by the January 1, 2025 deadline. Small businesses formed after January 2024 or those changing ownership information throughout the year have been given 30 days from date of formation to file. Those that willfully fail to file face penalties of $500 per day, up to $10,000, plus up to two years of imprisonment. The filing requests the full legal name of the reporting company and any trade or DBA names, the business address, state or tribal jurisdiction of formation or registration, IRS TIN along with additional details on beneficial owners and, for newly created entities, company applicants.
This requirement is expected to prompt 32.6 million filings in the first year alone along with five to six million filings each year thereafter. The American Institute of Certified Public Accountants (AICPA) along with several state CPA societies have pushed for a deferral.
Massachusetts residents in support of rule deferral may share their opinions with U.S. Senator Elizabeth Warren and U.S. Senator Edward Markey. You may also share your opinion with your House of Representatives member based on your district.
Those in support of deferral who reside outside of Massachusetts may:
- Find and share their opinion with their House of Representatives member.
- Find and share their opinion with their U.S. Senator.
AAFCPAs is closely monitoring the new BOI reporting requirement and the Protecting Small Business Information Act of 2023, and we will provide updates as appropriate.
If you have questions, please contact Erica Nadeau, CPA, MST, Tax Partner at 774.512.4111 or firstname.lastname@example.org, Joshua England, LLM, Esq., Partner & Tax Attorney at 774.512.4109 or email@example.com—or your AAFCPAs Partner.