The legal requirement to file Beneficial Ownership Information Reports (BOIRs) with FinCEN has been suspended by a court decision. However, until we see evidence that this requirement will be withdrawn, it is imperative that you understand its impacts.
Here is what you must know:
- FinCEN is the Financial Crimes Enforcement Network, an arm of the U.S. Dept. of Treasury. In 2021, Congress adopted the Corporate Transparency Act (CTA), intended to ferret out money laundering, fraud, and terrorism financing. To find out who controls money within corporations, CTA required small corporations (S corps and LLCs) to report “beneficial ownership” information to FinCEN. (That information was already largely known for larger and publicly traded corporations.)
- “Beneficial owners” are defined as persons who hold a 25% or more stake in a corporation. But “beneficial owners” also include senior corporate officials and persons who “substantially control” major business decisions, even through memberships on the company’s Board of Directors, regardless of how much financial ownership of the business they may actually have.
- The BOIRs would send to FinCEN significant personal information on each “beneficial owner,” including name, address, Social Security number, passport number, copies of driver licenses and state identification cards – information companies and individuals consider private and personal.
- Deadlines for submitting BOIRs to FinCEN depended on when the corporation was officially formed. The deadlines began in December 2024.
- Litigation challenging the constitutionality of CTA resulted in differing decisions in courts across the country. On December 26, 2024, the 5th Circuit Court of Appeals issued a nationwide injunction against enforcement of the Corporate Transparency Act. FinCEN has acknowledged that injunction, as an appeal proceeds. FinCEN has said it would continue to accept “voluntary” BOIRs.
That is what you must know. Here is what you must do:
- For the moment, nothing. Even if FinCEN is accepting “voluntary” BOIRs, continued litigation and potentially Congressional legislation or Executive actions may change the filing deadlines and details or the need to file at all.
- Work only with your trusted accountant and trusted attorney. (See ATBS information above.) Be aware of scam artists who maintain the requirement is still in place and offering to help you file. Don’t put personal information in a stranger’s hands.
- Remember this: There is currently no legal requirement to file Beneficial Ownership Information Reports (BOIRs) with FinCEN. Now you know what that means.
