New Deadline for Small Businesses: January 13, 2025
The U.S. Treasury Department has extended the deadline for millions of small businesses to file a new form, known as a Beneficial Ownership Information (BOI) report, to January 13, 2025. This delay comes as a result of legal challenges to the new reporting requirement under the Corporate Transparency Act.
What You Need to Know
The BOI report is required for approximately 32.6 million businesses, including certain corporations, limited liability companies, and others. However, many small businesses are exempt, such as those with over $5 million in gross sales and more than 20 full-time employees.
Penalties for Noncompliance
Businesses and owners that fail to comply with the reporting requirement may face civil penalties of up to $591 a day, adjusted for inflation, as well as criminal fines of up to $10,000 and up to two years in prison.
Why the Delay?
The Treasury Department delayed the compliance deadline following a recent court ruling. A federal court in Texas had issued a nationwide preliminary injunction that temporarily blocked the Financial Crimes Enforcement Network (FinCEN) from enforcing the rule. However, the 5th U.S. Circuit Court of Appeals reversed that injunction, leading to the extended deadline.
Current State of Filings
As of December 1, the federal government had received about 9.5 million filings, which is only about 30% of the estimated total. Many businesses are likely unaware of the requirement, and it’s “unlikely” that FinCEN would impose financial penalties except in cases of bad faith or intentional violations.
What’s Next?
Businesses have different compliance deadlines depending on when they were formed. Those created or registered before 2024 have until January 13, 2025, to file their initial BOI reports, while those formed on or after January 1, 2025, have 30 days to file a report. Additionally, there may be further court rulings that impact reporting, and litigation is ongoing in the 5th Circuit regarding the constitutionality of the Corporate Transparency Act.
Leave a Reply