Under the Corporate Transparency Act (CTA), many companies are now required to report information to FinCEN (U.S. Treasury Financial Crimes Enforcement Network) about the individuals who own or control them.

The required information is called BOI (Beneficial Ownership Information). FinCEN began accepting reports on January 1, 2024. The CTA has strict reporting requirements and hefty fines up to $500 per day for late/missing reports. There are two important updates business owners should be aware of:

1) Beware of fraudulent attempts to obtain confidential/privileged BOI information! These fraudulent scams may include:

• Correspondence requesting payment. There is NO fee to file BOI directly with FinCEN. FinCEN does NOT send correspondence requesting payment to file BOI. Do not send money in response to any mailing that claims to be from FinCEN or another government agency.
• Correspondence that asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. Do not click any suspicious links or attachments or scan any QR codes in emails, on websites, or in any unsolicited mailings.
• Correspondence that references a “Form 4022,” or an “Important Compliance Notice.” This correspondence is fraudulent. FinCEN does not have a “Form 4022.” Do not send BOI to anyone by completing these forms.
• Correspondence or other documents referencing a “US Business Regulations Dept.” This correspondence is fraudulent; there is no government entity by this name.

2) You may have heard the BOI reporting was declared unconstitutional by a federal district court. That is true; however, the ruling only protects particular plaintiffs who were involved in the court case. On March 1, 2024, in the case of National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), a federal district court in the Northern District of Alabama, Northeastern Division, entered a judgment concluding that the Corporate Transparency Act exceeds the Constitution’s limits on Congress’s power and enjoining the Department of the Treasury and FinCEN from enforcing the Corporate Transparency Act against the plaintiffs.

NMBC will monitor further court action and keep our members informed about this issue. In the mean time, be aware that for companies who existed prior to January 1, 2024, the time limit to file BOI is January 1, 2025. New companies (to include LLC’s) that are formed after January 1, 2024 must file the BOI within 90 days of formation. At this time, the ‘unconstitutional’ ruling from Alabama does not protect businesses who were not a plaintiff in the case from the requirement to file with CinFEN. More information on CinFEN, BOI requirements HERE.

Contact the NMBC office at 505-836-4223 if you have questions.