Interim BOI Rule Exempts Domestic Entities From Reporting Requirements
FinCEN published an “interim final rule” on Friday, March 21, related to business ownership information (BOI) reporting. This new rule exempts “domestic entities” – corporations, limited liability companies, or other entities formed under state law – from having to report any information to FinCEN. The reporting requirements would only apply to an entity that is a corporation, limited liability company, or other entity that has been formed under the laws of a foreign country and is registered to do business in any state or tribal jurisdiction by filing a document with the secretary of state or similar office under the law of that state or Indian tribe.
Companies that are considered reporting companies under this new definition have 30 days from the date of the publication of these rules to comply with the reporting requirements.
Other BOI Updates
The new rule also exempts foreign reporting companies from having to provide information related to any U.S. persons who are considered beneficial owners. The U.S. persons are also exempt from having to provide their information to a reporting company for which they are a beneficial owner.
This is a welcome relief for many businesses that were previously subject to the reporting requirement but are now exempted from the definition of a reporting company. Several commentators question whether there will be challenges to these new rules as they may not be in line with Congressional intent but who would be interested in asking for more compliance burdens on small businesses.
As always, GBQ will continue to monitor for future developments in this area and provide updates as necessary. Click here to sign up for “tax updates.”
By: Kevin Dunn, CPA, Director, Tax & Business Advisory Services, Tim Schlotterer, Director of Tax Services, & Tyler Gabalski, CPA, Manager, Tax & Business Advisory Services
