{"id":1737,"date":"2024-12-27T12:28:40","date_gmt":"2024-12-27T17:28:40","guid":{"rendered":"https:\/\/thetimesfinancial.com\/?p=1737"},"modified":"2024-12-27T12:28:41","modified_gmt":"2024-12-27T17:28:41","slug":"treasury-department-delays-beneficial-ownership-reporting-deadline","status":"publish","type":"post","link":"https:\/\/thetimesfinancial.com\/?p=1737","title":{"rendered":"Treasury Department Delays Beneficial Ownership Reporting Deadline"},"content":{"rendered":"\n

The U.S. Treasury Department<\/strong> has extended the deadline for small businesses to file the Beneficial Ownership Information (BOI) report<\/strong> under the Corporate Transparency Act (CTA)<\/strong>. Businesses now have until Jan. 13, 2025<\/strong>, to comply with the new rule, which was originally due on Jan. 1, 2025.<\/p>\n\n\n\n

Key Details of the BOI Reporting Rule<\/h2>\n\n\n\n

The BOI reporting requirement, managed by the Treasury\u2019s Financial Crimes Enforcement Network (FinCEN)<\/strong>, affects approximately 32.6 million businesses<\/strong>, including certain corporations and limited liability companies.<\/p>\n\n\n\n

    \n
  • Penalties for Noncompliance<\/strong>: Businesses failing to comply face civil penalties of $591 per day<\/strong> (adjusted for inflation) and criminal fines of up to $10,000<\/strong>, along with potential imprisonment of up to two years.<\/li>\n\n\n\n
  • Exemptions<\/strong>: Businesses with more than $5 million in gross sales<\/strong> and 20 full-time employees<\/strong>, as well as banks, credit unions, and other large entities, may not need to file.<\/li>\n<\/ul>\n\n\n\n

    Why the Deadline Was Extended<\/h2>\n\n\n\n

    The extension follows a Dec. 3 federal court ruling<\/strong> in Texas that issued a preliminary injunction blocking FinCEN from enforcing the rule. Although the 5th U.S. Circuit Court of Appeals<\/strong> reversed the injunction, the delay acknowledges that businesses may need additional time to comply due to the injunction\u2019s temporary effect.<\/p>\n\n\n\n

    \u201cBecause the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline,\u201d stated FinCEN on its website.<\/p>\n\n\n\n

    Low Compliance Rates<\/h2>\n\n\n\n

    Data from FinCEN suggests many businesses remain unaware of the requirement. As of Dec. 1, 2024<\/strong>, only 9.5 million filings<\/strong>\u2014approximately 30% of the estimated total\u2014had been submitted.<\/p>\n\n\n\n

    \u201cMost non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,\u201d wrote Daniel Stipano<\/strong>, a partner at Davis Polk & Wardwell, in an email.<\/p>\n\n\n\n

    Treasury\u2019s Focus on Education Over Enforcement<\/h2>\n\n\n\n

    FinCEN has indicated that its primary goal is to educate the public about the new rule, rather than immediately imposing penalties. \u201cIt\u2019s unlikely FinCEN would impose financial penalties except in cases of bad faith or intentional violations,\u201d added Stipano.<\/p>\n\n\n\n

    Compliance Requirements<\/h2>\n\n\n\n

    The BOI report is not an annual filing but must be updated or corrected as necessary. Deadlines vary based on a business\u2019s formation date:<\/p>\n\n\n\n

      \n
    • Pre-2024 Formations<\/strong>: Must file by Jan. 13, 2025<\/strong>.<\/li>\n\n\n\n
    • Post-Jan. 1, 2025, Formations<\/strong>: Must file within 30 days<\/strong> of creation or registration.<\/li>\n<\/ul>\n\n\n\n

      Legal Challenges Continue<\/h2>\n\n\n\n

      Litigation surrounding the Corporate Transparency Act<\/strong> remains unresolved. Cases in the 5th Circuit Court of Appeals<\/strong> and other jurisdictions question the law\u2019s constitutionality, with the possibility of reaching the Supreme Court.<\/p>\n\n\n\n

      The incoming Trump administration<\/strong> could alter the government\u2019s stance on the CTA, adding further uncertainty to the future of BOI reporting.<\/p>\n","protected":false},"excerpt":{"rendered":"

      The U.S. Treasury Department has extended the deadline for small businesses to file the Beneficial Ownership Information (BOI) report under the Corporate Transparency Act (CTA). Businesses now have until Jan. 13, 2025, to comply with the new rule, which was originally due on Jan. 1, 2025. Key Details of the BOI Reporting Rule The BOI […]<\/p>\n","protected":false},"author":10772,"featured_media":1739,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[826,828,823,824,829,825,827,831,830,832],"class_list":{"0":"post-1737","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance","8":"tag-boi-exemptions","9":"tag-boi-reporting-deadline","10":"tag-corporate-transparency-act","11":"tag-corporate-transparency-act-litigation","12":"tag-fincen-compliance","13":"tag-fincen-penalties","14":"tag-small-business-reporting-requirements","15":"tag-treasury-department-boi-extension","16":"tag-trump-administration-cta-stance","17":"tag-u-s-treasury-boi-rules"},"_links":{"self":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/1737","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/users\/10772"}],"replies":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1737"}],"version-history":[{"count":1,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/1737\/revisions"}],"predecessor-version":[{"id":1740,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/1737\/revisions\/1740"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/media\/1739"}],"wp:attachment":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1737"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1737"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1737"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}