As of the start of 2024, small companies meeting certain qualifications were required to file beneficial ownership information reports (BOI) with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement came as part of the 2021 Corporate Transparency Act.
However, there have been twists and turns to it in the last few weeks. Ultimately, as of January 24, 2025, the BOI report is still not required, despite a Supreme Court ruling.
Originally, the deadline to file the BOI report was January 1, 2025. In late December, that deadline was extended to January 13, following some litigation that may have slowed people down in their filings. Then on December 26, the requirement was put on hold as a result of a court decision. The latest action was a Supreme Court ruling on January 23, but even that wasn't enough to force the requirement into action.
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Some 32.6 million small businesses would qualify to have to submit this form, according to the government. That includes corporations as well as LLCs, and it is for those companies created or registered before January 1, 2024. Those that register after January 1, 2024, would have 90 days to file it, and those that register after January 1, 2025, would have 30 days to file it.
What's going on with the BOI report deadline?
The National Federation of Independent Business has been fighting the BOI reporting requirement, calling it burdensome and an overreach. With several groups, the lawsuit Texas Top Cop Shop Inc. et al v. Garland et al has been ongoing.
In early December, a preliminary injunction was issued, stopping the requirement to submit a BOI report. But on December 23, the 5th Circuit Court of Appeals overturned that. So for a few days, FinCEN was requiring it, with an extended deadline of January 13 to give companies a little more time. However, on December 26, a different panel of the 5th Circuit vacated the December 23 order. In other words, it put preliminary injunction is back in place and BOI reports were again not required.
The most recent news was January 23, when the Supreme Court issued a ruling allowing enforcement of the Corporate Transparency Act. However, that ruling didn't address a different national injunction. As such, long story short, BOI reporting is still not required.
FinCEN confirms this on its website (emphasis mine) with a note published Friday: "As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force."
It's possible this will change again, whether through the next action in the courts or through a decision by the administration of President Donald Trump or other lawmakers. Just last week, Republicans in Congress reintroduced a bill to repeal the Corporate Transparency Act, calling it "a big government overreach."
Do you have to file a BOI report?
If you have an LLC or otherwise a small, registered business, chances are, you would have to fill out this form if the injunction is lifted and it's allowed to be required.
The rule would apply to small businesses — companies with more than 20 full-time employees or that have made over $5 million in gross receipts or sales over the previous year do not have to file this form. There are other exceptions, which you can find listed out from FinCEN here.
FinCEN's basic flowchart says that if the company is a corporation, limited liability company, or if it was "created by the filing of a document with a secretary of state or any similar office," there is a chance it qualifies as a "reporting company" and will have to submit a BOI report, unless it has another exemption.
If you're not totally sure if your company qualifies, you should check with your CPA or another financial professional you work with.
What happens if you don't submit a BOI report?
If the injunction is lifted, your company is required to submit a BOI report and you don't by the deadline, you could face a hefty fine.
That could include civil penalties up to $500 daily for each day you don't file, a fine of $10,000, or even imprisonment for up to two years. So, you should be sure to check if you have to submit this report.
How do you submit a BOI report?
While reporting is currently not required, as a result of the ongoing litigation, "companies may continue to voluntarily submit beneficial ownership information reports," per FinCEN.
To submit a BOI report, you just need to go to the FinCEN BOI site. Filing is free, and you can do it directly through the website. You'll need basic information including the tax identification information and information for the beneficial owner.
A "beneficial owner," per FinCEN, is "an individual who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests." This has to be an individual, not a trust, corporation or other legal entity.
Avoid mistakes in your BOI filing
It only takes a few minutes to fill out the report, but you want to make sure to avoid mistakes, attorney John L. Williams emphasized in comments to Kiplinger. You can work with a lawyer or CPA to help accurately submit the BOI report.
"I would suggest that at least two people be involved in any filings," Williams said. "It is just too easy to make rookie mistakes."
These are some common missteps Williams says he's seen:
- Name mismatch, including only using a middle initial or leaving middle names out entirely
- Getting addresses wrong, including basic typos
- Inputting the wrong company applicants
- Errors in business names, not listing DBAs; spelling company names wrong and/or leaving out punctuation
The BOI form requires uploading an image of an identifying document, like a passport or driver's license. Williams says some people are struggling to get that image right, either because of technical issues or not understanding it should be an image of the identifying document.
After you finish the submission, you should download the transcript. That keeps a record of what was submitted.
While you can work with a professional to help submit the BOI report, make sure it's a trusted professional. There have already been warnings about scams regarding third-party platforms claiming to help with filings.
Why do you need to submit a BOI report?
The intent of these reports is to help eliminate corruption and crimes. I'll let Treasury Secretary Janet Yellen take it away from here with her explanation:
"Corporate anonymity enables money laundering, drug trafficking, terrorism, and corruption. It harms American citizens and puts law-abiding small businesses at a disadvantage. Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures."
We'll standby for now to see what happens next with this requirement.
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