Pivot CPAs Clients –
As part of the effort of the United States to prevent concealment of assets through shell companies or other similar structures, the Corporate Transparency Act (31 U.S.C. 5336) and its accompanying regulations (collectively, the CTA), require beneficial ownership information (BOI) reporting by certain entities, characterized as reporting companies. Effective January 1, 2024, many companies, including many of our clients, will be required to report information electronically regarding their beneficial owners to the Financial Crimes Enforcement Network of the U.S. Treasury Department (FinCEN), through a secure filing system on the FinCEN website (www.fincen.gov).
For companies created or registered prior to January 1, 2024, reporting is required by January 1, 2025. For companies created or registered on or after January 1, 2024 and before January 1, 2025, reporting is required within 90 calendar days of the earlier of receiving the actual or public notice that the company’s creation/registration is effective. Updates to such reporting will also be required, and entities and individuals may be subject to civil or criminal penalties due to lack of compliance with CTA. On its website, FinCEN has posted Frequently Asked Questions. One answer to questions about report preparation reads that “FinCEN expects that many, if not most, reporting companies will be able to submit their BOI to FinCEN on their own using guidance FinCEN has issued. Reporting companies that need help meeting their reporting obligations can consult with professional service providers such as lawyers or accountants.”
Questions have been raised as to whether Pivot CPAs will assist clients in preparing BOI reports. The BOI reporting requirements are mandated under Title 31 of the United States Code, “Money & Finance.” Section 5336 of Title 31 includes the legal requirements of who must file, the exemptions from filing, and the information to be reported. The information to be reported on this form arises from determinations that are primary legal in nature. For a variety of reasons, including concerns regarding the potential for the unauthorized practice of law, Pivot will not prepare these forms or assist clients in preparing these forms (e.g., compiling and/or transmitting data that a client has provided).
Pivot CPAs will continue to make our clients aware of the new BOI reporting requirements. If clients ask whether Pivot CPAs can assist with BOI reports, we will advise our clients that we do not, and we will refer our clients to counsel.
There is a lot of pressure to postpone this BOI reporting or get rid of it altogether. This is a dynamic situation that may change in the near future. We will attempt to keep you aware of changes as they occur (see our website for updates.).
