The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has posted an alert stating it has been notified of recent fraudulent attempts by hackers to solicit information from individuals and entities who may be subject to reporting requirements under the Corporate Transparency Act.
The FinCEN alert says to beware of e-mail and/or letter correspondence titled “Important Compliance Notice” and asks the recipient to click on a URL or scan a QR code; these e-mails and/or letters are fraudulent.
FinCEN asks business owners and any solicited administrators to not respond to these fraudulent messages, or click on any links or scan any QR codes within them. FinCEN does not send unsolicited requests.
There are only two months remaining before January 1, 2024, when many U.S. corporate entities will be required to comply with the Corporate Transparency Act (“CTA”) and report information about their beneficial owners (i.e. the individuals who ultimately own or control the company) to FinCEN, a bureau of the U.S. Department of the Treasury.
In preparation for that date, FinCEN has published several tools and resources online to assist small businesses in understanding the rules and if those businesses are required to file a beneficial ownership information (“BOI”) report to FinCEN. These resources include:
- BOI Newsroom
- Latest press releases issued by FinCEN around the CTA; testimonies and speeches in front of the House Committee on Financial Services, etc.
- Quick Reference Guide
- Frequently Asked Questions
- What is BOI? Why do companies have to report? What companies will be required to report? How will I report? List of types of companies that meet exemption requirements, etc.
- Small Entity Compliance Guide
- Describes each of the BOI reporting rule’s provisions, answers several questions small businesses may have around BOI reporting requirements, and provides interactive checklists, infographics, and other tools to assist businesses in complying with the BOI reporting rule.
Earlier this year, we reported that FinCEN published its reporting requirements and key terms defined within the Corporate Transparency Act. The CTA requires a Reporting Company to file reports to identify the company’s owners and those who filed the documents creating or registering the company within the state. A Reporting Company will be required to report its legal name, any trade name or assumed name (DBA), its address, the jurisdiction in which it was formed or first registered, and its taxpayer identification number.
A Beneficial Owner and the Company Applicant (which can be up to two individuals) of a Reporting Company will be required to file a BOI Report consisting of the individual’s full legal name, birthdate, address, unique identifying number from a non-expired driver’s license, identification document, or U.S. passport, and an image of that identification document.
The CTA lists 23 exemptions, such as companies in heavily regulated industries, like federal and state credit unions, certain banks, insurance companies, and nonprofits. Also, large operating companies with at least 20 full-time employees, more than $5 million in gross receipts or sales, and an operating presence at a physical office within the United States are exempt.
We will continue to monitor all compliance and reporting obligations released by FinCEN prior to the effective date of January 1, 2024. It is important for business owners and leaders to be proactive in determining how FinCEN’s reporting requirements impact you and your operations. It is important to consult a professional if you have any questions.
Additional Resources around the CTA and BOI Reporting Rule:
- “FinCEN Publishes Compliance Guide to Help Small Businesses Better Understand Corporate Transparency Act Requirements,” October 2023
- “FinCEN Publishes Reporting Requirements, Definitions of Corporate Transparency Act,” May 2023
- “Beneficial Ownership Reporting – Key Questions” and “Beneficial Ownership Information Reporting – FAQs,” March 2023
- “FinCEN Beneficial Ownership Information Reporting,” January 2023
About Sean Buckley: Adams and Reese Associate Sean Buckley practices in corporate services, real estate, and mergers and acquisitions. He advises clients with matters related to entity selection and formation, corporate governance, and real estate transactions to identify proactive solutions and to mitigate risks.