Nationwide Temporary Injunction that Suspends Enforcement of the Corporate Transparency Act and BOI Reporting Remains in Place within the Texas Top Cop Shop, Inc. Court Case and Continuing Developments 

Executive Summary

·    The Corporate Transparency Act has taken effect, and about 32.6 million businesses are subject to the Beneficial Ownership Information reporting requirement to FinCEN (an agency within the US Dept. of Treasury).  

·    Blankenship CPA Group, PLLC is here to help you, but you must separately engage us to assist your company as this is not part of a Tax, Audit, Accounting, or any other ongoing engagement you have with the firm.  

·    There are 23 exemptions that may or may not apply to your business, but there is no consequence to reporting if you are not required. Accordingly, when in doubt, complete the BOI reporting. More common exemptions include those for Large Operating Companies, Tax Exempt Entities and Inactive Entities.   

·    Failing to comply can result in a $591 per day penalty, up to two years in prison, and/or a $10,000 fine.  

·    Owners as well as senior officers or those with “substantial control” all will have reporting requirements or responsibilities to ensure compliance.  

·    Reporters should generally always create and utilize Individual FinCEN IDs as a best practice.  

·    Entities organized in 2024 must file within 90 days, while older entities must file before the end of 2024.

·    Read more below to learn about some of the high-level details of this act, and how to engage us to assist if needed.

Key Points to Consider

1.  Who Needs to Comply? This includes domestic and foreign companies including corporations, LLCs, or similar entities that have registered or formed their company with a state (such as a Secretary of State’s Office) or tribal office. However, some domestic entities registered in this way are exempt.

2.  Exemptions: There are 23 exemptions, such as for publicly traded companies, banks, and certain inactive entities. Also, many larger domestic operating companies with over 20 full-time employees and more than $5 million in receipts may meet exemption #21 if additional specific criteria are met. As noted below there are specific penalties if you fail to comply. https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf

3.  Beneficial Owners: These are individuals who either have significant control over a company or own/control at least 25% of its interests. This will include both owners as well as officers or those with substantial authority to transact business (those who exercise “substantial control”).

4.  Filing Deadlines: All reporting entities formed on or before 12/31/23 must file by the end of 2024.  For newly formed entities in 2024, you must file within 90 days.  For entities created in 2025 and after, the filing must be made within 30 days of formation. For all changes in BOI, an update must be filed within 30 days once registered. This is why procuring a FinCEN identifier as discussed below is important.

5.  Required Information: Companies must provide details like their name, address, and tax ID. They also need to report information about beneficial owners, including their personal details and identification documents such as a driver’s license or passport. The firm has determined that utilizing the Individual FinCEN Identifier process for all beneficial owners when there is more than one "beneficial owner" is the best practice for a long list of reasons.

6.  Penalties for Non-Compliance: Businesses that willfully fail to comply can face civil penalties of up to $591 for each day the violation continues, imprisonment of up to two years, and/or a fine of up to $10,000. Senior officers of an entity that fails to comply may also be personally held liable.

Blankenship CPA Group, PLLC will not automatically handle this reporting unless specifically hired for the service. Completing BOI reporting is not part of any Tax, Audit, Accounting, or any other ongoing engagement you have with the firm. It must be separately engaged. If you would like us to reach out to you about completing this service for you, please click the link directly below and we will reach out to you to begin the process. Our fees start at $750 to complete this filing on your behalf and we will require specific documents from you that exceed the standard information we already have from any existing engagement.