The Treasury Department’s approach to Beneficial Ownership Information (BOI) has seen significant updates recently, including new guidance.
Beneficial Ownership Information (BOI) refers to the details about the individuals who ultimately own or control an entity, particularly those who possess a substantial interest or exert significant control. This information seeks to understand the real owners in control of companies, which can be vital for preventing activities such as money laundering, tax evasion, and fraud. For further clarification, see the DMJPS summary here.
The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, has been at the forefront of implementing more stringent reporting and disclosure requirements for companies regarding their beneficial owners. Recently, new rules have been put in place that require reporting entities to disclose their beneficial owners to FinCEN.
Update on Beneficial Ownership Information (BOI) Reporting Requirements
- Initially Effective Date: BOI reporting requirements were initially effective January 1, 2024 – Refer to our original article for initial reporting details.
Regulatory Fluctuations:
- In December 2024 and early January 2025, a series of federal and Supreme Court rulings repeatedly altered the reporting requirements.
- The Financial Crimes Enforcement Network (FinCEN), an arm of the Treasury Department responsible for processing and enforcing the reporting, kept pace with these changes, updating its website and guidance accordingly.
- An injunction was in place through most of January, delaying enforcement of the reporting requirements.
Recent Key Developments:
- February 17, 2025: A federal court lifted the injunction.
- February 18, 2025: FinCEN extended reporting deadlines to March 21, 2025.
- February 27, 2025: FinCEN announced that it will not issue fines, penalties, or take enforcement actions against companies failing to file or update BOI reports until a forthcoming interim final rule takes effect. “Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed.” The site goes on to indicate that it will issue the interim rule “no later than March 21, 2025.”
Treasury Department’s Latest Position & Current Status:
The Treasury Department later explained, “Not only will (the Treasury Department) not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”
Therefore, as of this writing, the Treasury Department has confirmed that it will not enforce penalties or fines under the existing BOI reporting deadlines and will further limit enforcement to foreign reporting companies—entities formed outside the U.S. but registered to do business in the U.S.
As of now, BOI reporting is voluntary for U.S. entities, and enforcement is expected to apply only to foreign entities. FinCEN is set to release an interim final rule by March 21, 2025, which will provide further clarity.
Rollin Groseclose, CPA, CGMA
Rollin Groseclose, CPA, CGMA is a DMJPS PLLC Partner and the Director of Tax Services. Rollin is responsible for coordinating the firm’s tax services for clients, both businesses and individuals, and he helps the firm stay up to date on the latest tax developments. He has significant expertise in the areas of tax and business advisory services and focuses his energies on manufacturing and distribution, construction and real estate development, and hospitality. His expertise is also extensive in purchasing and marketing cooperatives, as well as with clients that have multi-state and international activities.