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Risks of CTA Beneficial Ownership Reporting

Lee B

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The AICPA has published some very useful guidelines:


Two key points:

"To help reduce the likelihood of claims asserting a failure to advise a client of CTA, consider sending a newsletter or other general client notification letter to all clients informing them of CTA and its reporting requirements. Retain a copy of the newsletter as well as the distribution list. "

"Unless specifically engaged to provide CTA assistance under a separate engagement letter, include a provision in all engagement letters, regardless of service, disclaiming a responsibility to do so. A sample provision is provided in this Risk Alert."


After reading this, I am going to draft a separate letter notifying my clients of the CTA and the reporting requirements

declining to provide any services or advice related to the CTA and it's reporting requirements

which I will require my clients to sign in addition to my annual tax authorization/engagement letter.


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While yet more work, I am not sure what the big deal is. If many types of entity had applied for credit or banking accounts/cards/loans etc. in the last many years, the app has to include the same or similar info. Certain entities also have annual filing which has to include same or similar as well. So while this will be new for some (publishing new info, for many is is just more of what is already being reported one or more other ways.

For tax preparer relationship, I suppose there are many of these types of suggested notices which are mandated by insurers. The n my case, it will be interesting to see if preparer or corp agent mentions this item (same office, different specialists).

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At least in CA, this is not completely new.  Annual corporate CA filing requires similar information. One of the reasons we keep a PO Box, so no one has to list their home address. Also is an odd requirement of my city, no home offices can list or advertise their home address (exceptions for things like piano and swim lessons). Not to far back, a person who had a wrap on their car was getting dinged for parking in their own driveway...

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1 minute ago, Lee B said:

IRS rules say that if your street address is a deliverable address then you shouldn't use a P O Box.🙄

That is what one pays an agent for.  I am not listing my home address on anything work related. I have not looked at the rules for this "new" reporting yet, but the USPS does give street address versions of their PO Box addresses, if it gets to that.

To comply with my local regs, I am never allowed to use my home address for business purposes. I am also keenly aware of what those who are full time travelers do, such as setting up a domicile they only ever have to visit once (SD is very supportive).

The first image is from the fincen site. The second is from the federal register. Since our official business address is either our registered agent's, or the street address for our physical PO Box, I see no reason I cannot meet the "or" and not use any of our personal addresses.




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I have not dug into the definition. Plain language reading, and I am good, personally, with RA or the PO Box's street address, in my case (where I am locally prohibited from using my home address). My DL has the same PO Box on it. My PO Box is my legal business location because of my local rules.

The above examples refer to "or" "business street address".  I have two possibilities to use, RA or the street address provided by USPS for the PO Box. The first example even specifically mentions if no residential or business street address is available, so fincen has pondered this and offered at least a couple of valid alternatives. next of kin, nope, not doing that, but "another contact individual" looks good for using RA.


I do get it, some may think why bother. But, when you have had those with mental/moral issues contact you at your residence, you think differently.  I am not the only one who lives in our home...

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I have been working with our banks at my day job to create some new accounts.   I was surprised to see the BOI form on their new account application.   Looks like the banks are collecting so the FinCen folks can cross reference to the reporting by the company.   Interesting twist.

Longview, TX

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See:  https://www.fincen.gov/boi-faqs#F_3


F. 3. What information will a reporting company have to report about its beneficial owners?

For each individual who is a beneficial owner, a reporting company will have to provide:

  1. The individual’s name;
  2. Date of birth;
  3. Residential address; and
  4. An identifying number from an acceptable identification document such as a passport or U.S. driver’s license, and the name of the issuing state or jurisdiction of identification document (for examples of acceptable identification, see Question F.5).

The reporting company will also have to report an image of the identification document used to obtain the identifying number in item 4.

FinCEN’s Small Entity Compliance Guide includes a checklist to help identify the information required to be reported (see Chapter 4.1, “What information should I collect about my company, its beneficial owners, and its company applicants?”).


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One additional very important point:

"The article makes the important point that the enforcement of the CTA has not been delegated to the IRS, as the FBAR regulations have.

Therefore, the privileges that CPAs and EAs have when representing clients before the IRS do not apply.

Similarly, their errors and omissions insurance may not cover their actions in helping clients comply with the CTA, perhaps even to the extent of answering a simple question."

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