FINCEN REPORTING

[Marie]

I want to be able to help my clients and report their companies or LLCs to Fincen.  What do I do to be able to do this? 

[Lion EA]

 

https://www.fincen.gov/boi

https://www.fincen.gov/boi-faqs

https://www.fincen.gov/boi/Reference-materials

https://www.fincen.gov/boi/small-business-resources

https://www.fincen.gov/sites/default/files/shared/BOI-Informational-Brochure-April-2024.pdf

[JohnH]

Thank you for the links.  This is a great resource. 

[ILLMAS]

Take a look at this post:  

 

[Corduroy Frog]

My information (from limited sources) tell me most CPAs and EAs won't touch this because of the penalties, and their E&O insurance won't cover them.  Again, I'm not sure my sources are as numerous as to conclude anything...

[Catherine]

1 hour ago, Corduroy Frog said:

most CPAs and EAs won't touch this because of the penalties

When the reporting went from paper forms to fill in and mail, to online only, they also instituted sky-high penalties for preparers who fill out forms, from client documents, in good faith, and completely true so far as they have any knowledge. At that point, I started telling clients - you do it. Not me. Nope. Nuh-uh. Not ever. Someone gives me wrong info and I have to pay? No way, no how, not ever.

So yeah, I won't touch them because of possible vicious penalties.

[Medlin Software, Dennis]

Starting to get mine done. Here is what I see so far.

One can have the BO's register and maintain their own data and report their FinCEN ID to whomever manages the business BOI registration/updates. I am using this method as I do not want to have to manage the BO's data. Likely removes some/all of the issues/risks of getting and managing individual data.

Must use login.gov to sign in, not id.me, so now I have both

Interestingly, my personal reg went through with only a business address. Meaning I "did not" open the help link and see where they state one should enter both a personal and business address for BOI usage. I also tested a UPS PMB address, and it worked fine with the PMB (failed with a # sign).

I also reviewed USPS's offering of a street address for their PO Boxes, but their contract explicitly excludes using it for a legal address.

With the ability of each BO to take on the responsibility of their own data, there is little risk on the business side, other than keeping the proper BO list correct. It also seems that a PMB will solve not only the non US issue, but for those who prefer not to, or are unable to, use their work at home address, and for those who have no physical location (such as permanent travelers). I have seen where using a registered agent address works for non US entities, so it might pass the online entry for US entities.

[Medlin Software, Dennis]

The unknown is once the individual ID's are setup, if the company process will reject if the individuals are only set for the business address. I don't want to test with known invalid information (such as just mine) so I have to wait to get the other ID's first.

[Randall]

On 5/23/2024 at 8:18 PM, Catherine said:

When the reporting went from paper forms to fill in and mail, to online only, they also instituted sky-high penalties for preparers who fill out forms, from client documents, in good faith, and completely true so far as they have any knowledge. At that point, I started telling clients - you do it. Not me. Nope. Nuh-uh. Not ever. Someone gives me wrong info and I have to pay? No way, no how, not ever.

So yeah, I won't touch them because of possible vicious penalties.

I agree.  I did this with the foreign accounts reporting.  I'll do the Form 8938 with the return but not the online FinCen reporting.  I plan to look into the new FinCen reporting and let my clients know about it but it will up to them to do it.

[Lee B]

I have decided to wait until October or November due to the legal challenges.

Another legal challenge has been filed in federal courts in Michigan.

[Medlin Software, Dennis]

Looking at what is already public, my only consideration is trying to allow anyone who wishes to not show their personal address, which so far, seems possible. Also making sure each person creates their own ID so they are the ones who decide what is included.

Our CA annual form almost went in last year with addresses some wanted to keep private. It is a constant battle.

[BulldogTom]

10 minutes ago, Lee B said:

I have decided to wait until October or November due to the legal challenges.

Another legal challenge has been filed in federal courts in Michigan.

I have advised my clients to wait until the fall as well.   I am not doing any of their filings, but I suspected there might be some pushback in an election year and there could be a delay in implementation from legislators or the courts.

But I did tell them to gather the information needed prior to that so the filing will be smoother.

Tom
Longview, TX

[Medlin Software, Dennis]

Suggesting to wait could be a can of worms too, such as "I could not get the information in time, since you told me to wait". Maybe a no comment is best, to avoid giving any advice which could bite.

This is a "nothing burger" for most. If the persons are privacy concerned, they already have things in place to shield their personal address as much as possible. It is easy to get a compliant UPS or other virtual address if one wants (for personal), and likely the same will be or is compliant for business address (if one stretches their thinking to be comfortable stating their business records exist at the virtual address, say on a server controlled by the mailbox company - who would never give the data up anyway).

The grey of where the records are is no different than pretending electronic data meets record retention rules without having to do the things electronic record retention for compliance actually requires.

[BrewOne]

does anyone have a cite for FBAR record retention requirements?  I would assume that FINCEN will require the same for the BOI.  I feel certain I read once that it was 5 years but now I can't find the source.

[Randall]

I thought there was some holdups too.  So I'm waiting for later in the year.  I'm not recommending anything to clients now.  I suspect most of them don't know anything about it.

[Lee B]

I agree. My largest client did receive a 3 page letter from their attorney back in January.

[Gail in Virginia]

So far I have had one client ask because their attorney was pushing to do something, and all that I told them was that I would follow their attorney's advice.  

[mcbreck]

I did my two businesses - took about 15 minutes total. I'm not handling it for clients - it's their responsibility as it isn't a tax issue. I have 1 client I will remind this fall but I'm not doing the work. Everything I've read says it's a legal issue with the federal government (entity type issue) and not my problem.

[Randall]

How will clients (entities) and non-clients know if and what they may have to do?  Is there a news announcement?  Or some way they will be informed?

 

[Lee B]

I am sending a short letter with a 2 page attachment to all of my clients that potentially qualify.

[Catherine]

6 hours ago, Lee B said:

to all of my clients that potentially qualify

There's the rub. How to tell who qualifies? I'd send it to everyone - by email, with delivery receipt. I had a lady years ago for tax prep; turned out she was a director of a non-US company that her dad had started back before I was born. No pay for it, but every few years she got dividends. That's how I discovered it - one year she turned up with big dividends to report, from some company I'd never heard of. Never would have guessed it. She lived on alimony and the proceeds of a little sell-online business she had making cutesy house stuff. 

[Lee B]

The only business/rental clients that I am not notifying are Schedule C or Schedule E filers.