Beneficial owner reporting: What business owners need to know

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It doesn’t stop there

Reporting doesn’t end with the initial submission. Any changes to the reported information must be updated within 30 days. Changes in residence, new driver’s licenses, or name changes due to marriage or divorce require reporting.

It is important to set up a system to monitor BOI changes, which can save you a lot of headaches (and money) down the road. Failure to report can result in severe penalties, including fines of up to $500 per day and criminal penalties of up to two years in jail and fines up to $10,000.

Hold on, there’s a lawsuit!

While these requirements aim to catch bad actors, some argue they are especially burdensome for small businesses. The National Small Business United (NSBU) sued the government, claiming the rules were too onerous. In March 2024, a judge ruled in their favor, but this relief applies only to the roughly 65,000 NSBU members involved in the lawsuit.

What does this mean for you?

For most real estate agents and brokers, BOI reporting is still required. FinCEN has stated, “Other than the particular individuals and entities subject to the court’s injunction, as specified below, reporting companies are still required to comply with the law and file beneficial ownership reports as provided in FinCEN’s regulations.”

The recent court case highlights the evolving legal landscape surrounding the CTA. However, playing it safe and filing your report remains the best course of action. FinCEN has already begun sending warning letters about the mandatory filing deadline to those who formed new business entities early in the year, reminding them of the $500 per day civil penalty and criminal penalties of up to two years in prison and fines up to $10,000.

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