FinCEN is now connecting with state societies to understand their pain points associated with filing the beneficial ownership information (BOI) reports. As background, as of July, FinCEN has only received approximately 2.5 million reports of the expected 32.6 million reports for this year. FinCEN is now focusing on raising awareness and also trying to understand any hesitation tax preparers may have in preparing the BOI reports.

Information gathered from AICPA membership and other stakeholders indicates that there are 3 main concerns as outlined below.

30-day Timeframe to Update or Correct BOI Reports

• The AICPA has had a long position to change the 30-day timeframe to a yearly filing requirement.
• The current 30-day requirement effectively creates a bifurcated work stream. In some situations, accountants may take on the initial filing, though may decline to engage further with the client on monthly tracking for form updates or corrections. In other situations, some accountants may take on the entire engagement, including filing corrected or updated information. This then creates, effectively, a 30-day tracking requirement for accountants who choose to engage with their client on this work and have no previous model to track their client changes in such a manner to ensure their client remains in compliance with the rule.
• Annually, tax preparer CPAs meet with small business clients to work through their clients’ tax filing needs, and it is in those annual interactions FinCEN BOI information changes will be captured.
• Creating a 30-day check-in process is not only time-consuming for the CPA, it may also result in an unnecessarily costly engagement for the small business client.
• It is within FinCEN’s ability to change the 30-day reporting timeframe.

Lack of Clarity

• There are still many pending questions that create areas of uncertainty.
• The AICPA has continually provided examples of areas where clarity is needed. It is our understanding that FinCEN is open to hearing where clarity is needed and that they are continuously updating the FAQs to reflect their position.

Unauthorized Practice of Law (UPL) and Liability

• AICPA has been meeting with FinCEN, Congressional staffers and external stakeholders to discuss legislative and regulatory solutions. All parties are working on supporting legislation that would provide safeguards for CPAs who perform the work and including a statement that services under the CTA are not considered UPL.
• Ultimately, the determination of UPL is at the state level. Mississippi has not provided an opinion, nor is one expected.
• Maryland and New Jersey have provided opinions stating that services can be performed by a CPA so long as professional judgement is used and to consider an attorney for the complex entity structures.
• Most recently, the Iowa Supreme Court issued an order to update their rules to specifically state that non-attorneys could provide BOI services, and it would not be considered unauthorized practice of law.

Until further filing guidance or changes are released, the reports should be filed as currently required whether a firm decides to submit the reports for their clients, use a third-party for reporting, or advise their clients of another avenue.

TYPES OF REPORTS:

Initial Report

• If the entity is formed on/after January 1, 2024, and before January 1, 2025, the report must be filed within 90 days of the date of formation.
• If the entity was formed before January 1, 2024, the report must be filed no later than January 1, 2025.
• If the entity is formed on/after January 1, 2025, the report must be filed within 30 days of the date of formation.

Updated Report

• Must be filed within 30 days of change to previously submitted information.
• NOTE THIS IS NOT AN ANNUAL FILING

Corrected Report

• Must be filed within 30 days after the reporting company becomes aware or has reason to know that information contained in a report was inaccurate when filed.