FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines

For Idaho, an entity formed by filing with the Idaho secretary of state is a Reporting Company, meaning it is an entity that must be reported to FinCEN. This includes corporations, limited liability companies, limited partnerships, limited liability limited partnerships, and possibly even general partnerships.

Significantly, there is no exception for small companies or even for companies with no employees. However, sole proprietors are not required to submit a report. There are exceptions to this requirement but they are limited and usually apply to entities that must already submit information to the federal government. The most common example is a tax-exempt entity. These are entities formed under a specific provision of federal law (i.e. Section 501(c)). A nonprofit entity is not necessarily tax exempt. Thus, it is possible that a nonprofit entity must still comply with the Corporate Transparency Act.

Note that an entity which is not engaged in active business may not need to comply but there are other criteria which must also be met for an inactive entity to be exempt.

Often, the name of a business entity will be different than the actual names of the people behind the business. Even if the business name includes the name of an owner, as the business develops and its reputation grows, those who take over the business may not share that name.

Unfortunately, the ability to do business under a different name is also exploited by the bad guys. If they start or take over an entity under a different name, it is easier for them and their criminal activity to avoid detection. To fight this, the Corporate Transparency Act requires most business entities to provide the government with information about the key people behind that entity.

Although the government intrusion into a business owner’s privacy is concerning, the obligation to provide information is not optional. A silver lining, if it is one, is that the reporting process is relatively straightforward. FinCEN does not charge a fee to comply. There is also no need to hire an attorney to comply. However, for those who would like assistance, our office can assist for a fee of $350. (Please be aware that, if we receive your request within 1 week of your deadline, the charge for expedited assistance will be $500.  We will also not be able to assure you of a timely filing). You can send a request for assistance to info@wrightlawidaho.com with “CTA” or “Corporate Transparency Act” in the subject line.

Reports are to be submitted online at www.FinCEN.gov. Additional information, including a guide for small business owners, can also be found on this website. Reporting must only be done once unless there is a need to update reported information.

Be aware that FinCEN is warning about scams to collect your information, which will otherwise be kept private. FinCEN will not send you an unsolicited request. If you receive an unsolicited email, perhaps titled “Important Compliance Notice,” do NOT click on a link or scan the QR code!

In a nutshell, companies that are required to file a report (not surprisingly called “Reporting Companies”) must provide information about “Beneficial Owners” of the company. A “Beneficial Owner” is the government’s term for a person who is an owner or who has substantial control – directly or indirectly – over the business. The information submitted will not be available to the public.

In addition to providing information about “Beneficial Owners,” “Applicants” for the company – generally the individual who files the formation document with state authorities – must also be identified. Only reporting companies created or registered on or after January 1, 2024, will need to report their company “Applicants.” If our office was the “Applicant”, meaning our office directly filed the document that created your company, contact us at info@wrightlawidaho.com to obtain the necessary reporting information.

The Reporting Company must provide its name and any alternative (DBA) names, the address of its principal place of business, the state of formation, and its taxpayer identification number or what is called a FinCEN identifier. Every Beneficial Owner or Company Applicant must furnish a full legal name, date of birth, residential address, and an identification number from a driver’s license, passport, or other state-issued identification, along with a copy of that document.

For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their reporting obligations once this update is provided.
Newly formed companies formed will have 30 days to report. Thus, if your company is formed after February 19, 2025, it is expected that you will have 30 days from formation to report.

FinCen threatens both civil and criminal penalties if you disregard the reporting requirements your beneficial ownership information reporting obligations.

For example, a person who willfully violates the BOI reporting requirements may be subject to civil penalties of up to $500 for each day that the violation continues. However, this civil penalty amount is adjusted annually for inflation and currently stands at $606 per day.

A person who willfully violates the BOI reporting requirements may also be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.Newly formed companies formed will have 30 days to report. Thus, if your company is formed after February 19, 2025, it is expected that you will have 30 days from formation to report.

Almost assuredly, yes. The Corporate Transparency is the subject of several lawsuits throughout the country, and the “Repealing Big Brothers Overreach Act “ has been reintroduced in both the House of Representatives and the Senate which if passed into law, would repeal the corporate Transparency Act. However, if a future court issues an injunction prohibiting enforcement of the Corporate Transparency, that injunction will more likely apply only to the parties to that lawsuit, and not to the country as a whole.