The Chronicles Of Grant County
New Federal Reporting Requirements
Now Mandatory – Again
Part Five
(The image was provided courtesy of the United States Department of the Treasury.)
It's back.
The requirement for most businesses in Southwest New Mexico and throughout the United States to file ownership details and personal information with the United States Department of the Treasury is back.
The new deadline for businesses to provide the information to the Federal government is March 21, 2025.
As noted in previous reports, the situation with the Beneficial Ownership Information (BOI) reporting requirements of the Financial Crimes Enforcement Network (FinCEN), a division of the U S Department of the Treasury, is confusing.
Part of the confusion has been due to different decisions by different Federal courts at different times.
A decision by a Federal court in Texas on February 18, 2025, has now allowed the U S Department of the Treasury to again mandate BOI reporting requirements authorized by the Corporate Transparency Act (CTA), a law passed by the U S Congress in 2021.
Please note that while most businesses must file a BOI report, some businesses are still exempt from this requirement. These businesses include a few specific businesses in Alabama as well as for members of the National Small Business Association who were members of that organization as of March 1, 2024. These specific businesses only are covered by an injunction issued by a Federal court in Alabama in 2024 – an injunction still in force for those specific businesses.
Some businesses – in other parts of the country – have different deadlines to file their BOI report because of disasters affecting their communities.
There may be further changes for the BOI reporting requirements prior to March 21, 2025, according to the U S Department of the Treasury.
"…In keeping with [U S Department of the] Treasury's commitment to reducing regulatory burden on businesses, during this 30-day period [February 19 to March 21, 2025] FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks," the U S Department of the Treasury noted in a news statement dated February 19, 2025. "FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce [the] burden for lower-risk entities, including many U S small businesses."
"For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025," the news statement continued. "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 BOI reporting obligations once this update is provided."
The news statement added that "Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company's reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline."
Here are details on several key aspects of the BOI reporting requirements:
As part of CTA, unless exempted, BOI reports need to be filed by corporations, limited liability companies (LLCs), and any other entities created by the filing of a document with a secretary of state or any similar office in the U S as well as entities created under the laws of a foreign country that have registered to do business in the U S by the filing of a document with a secretary of state or any similar office.
Those entities required to report are called "reporting companies."
Businesses file their BOI reports with the FinCEN.
BOI reports will provide the Federal government with detailed information about each reporting company as well as the individuals that own and/or control each reporting company. Those individuals are called "beneficial owners."
A beneficial owner, according to the FinCEN, is an individual who either directly or indirectly exercises substantial control over the reporting company or an individual who owns or controls at least 25% of the reporting company's ownership interests.
The FinCEN has specific definitions of what "substantial control" means.
Certain individuals with specific titles as well as key officials who have the ability to make management, financial, and operational decisions are among those that the FinCEN considers to have "substantial control" of reporting companies.
Not every business will be required to file a BOI report.
The FinCEN indicated that there are 23 types of entities that are exempt from the reporting requirements. A detailed list of all of the entities exempted from filing BOI reports is available on the FinCEN website, https://www.fincen.gov.
In addition to those specific entities exempted, if a business is operated as a sole proprietorship, it may also not have to file a BOI report with the FinCEN. The Federal agency detailed that a BOI filing would be required if the sole proprietorship was created or registered to do business by filing a document with a secretary of state or similar office, but if no such filing occurred, no BOI report would need to be filed.
A statement from the FinCEN specifically noted that "filing a document with a government agency to obtain (1) an IRS employer identification number, (2) a fictitious business name, or (3) a professional or occupational license does not create a new entity, and therefore does not make a sole proprietorship filing such a document a reporting company."
All BOI filings need to be done electronically through the website of the FinCEN.
Among the information required to be filed about each beneficial owner are the person's name, date of birth, and street address. In addition, an identification document of each beneficial owner must be uploaded to the BOI filing system.
Only specific types of identification documents are considered acceptable to meet the requirements of the FinCEN.
Detailed information about the reporting companies is also required to be filed with the FinCEN, including such items as the official name of the reporting company, any names that it may use in doing business, and its address. Newly-created companies are required to also provide information about any individuals who formed the new companies.
There is no fee for filing the BOI report with the FinCEN.
While filing a BOI report is not an annual requirement, reporting companies do have to file BOI reports as any information needs to be updated or corrected. Those updated BOI reports must be filed within 30 days of any change.
There are serious consequences for not filing BOI reports with the FinCEN.
Individuals and reporting companies required to file, but that don't do so face several potential sanctions. As of January 17, 2025, according to the Federal Register, the new Federal regulations include civil penalties of up to $606 for each day that the violation continues. Criminal penalties include up to two years of imprisonment and fines of up to $10,000.
Please note the civil penalty amount is tied to inflation. The initial civil penalty was up to $500. In 2024, that penalty amount was increased to up to $591.
The information filed with the FinCEN will be available to a variety of governmental and financial entities in the U S and beyond.
According to a fact sheet from the Federal government, information from the FinCEN can be utilized, for "…both criminal and civil investigations and actions, such as actions to impose civil penalties, civil forfeiture actions, and civil enforcement through administrative proceedings."
The FinCEN has a 57-page "Small Entity Compliance Guide" available detailing filing requirements for Beneficial Ownership Information. You can view this guide at https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf. Additional details on filing requirements, exemptions, and other relevant items for BOI reporting are also available on that website.
As noted previously in this news series, businesses may want to contact an attorney or another professional of their choice to determine whether they are required to file a BOI report or if they may be exempt from filing a BOI report with the FinCEN.
Do you have questions about communities in Grant County and Southwest New Mexico?
A street name? A building?
Your questions may be used in a future news column.
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© 2025 Richard McDonough
