As the deadline for Beneficial Ownership Information (BOI) reporting approaches, accountants are finding themselves increasingly involved in guiding clients through compliance with the Corporate Transparency Act (CTA). With the year-end deadline looming, the pressure is on for firms to ensure their clients meet these new federal regulations, enforced by the Financial Crimes Enforcement Network (FinCEN).
In the first nine months of 2024, only 4.3 million BOI reports were submitted to FinCEN, a small fraction of the 40 million reports expected to be filed before the January 1, 2025 deadline. With businesses facing substantial penalties for non-compliance, accountants are bracing for a surge in filings over the next few months. As FinCEN ramps up enforcement of the anti-money laundering provisions in the CTA, accountants must be ready to support their clients.
BOI reporting is new territory for many accounting firms, and the requirements can be complex. Here are a few important considerations for firms preparing for the BOI deadline:
Filing Deadline: January 1, 2025, is the official deadline for businesses to file their BOI reports with FinCEN. Missing the deadline could result in significant penalties, including fines of $10,000 per day for non-compliance.
Who Must Report: Understanding which clients are required to file is crucial. Accountants should help clients identify whether they are classified as a “reporting company” under the law and determine who qualifies as a “beneficial owner.”
Based on insights gathered from over a thousand accounting firms over the last two years, three distinct approaches to BOI reporting are emerging:
Smaller firms, which often maintain close relationships with clients, are taking a hands-on approach to BOI reporting. These firms are already responsible for clients’ state filings, and many are extending their services to include BOI reporting. By using specialized software, these firms are not only helping clients navigate the new requirements but also turning BOI reporting into a new revenue stream.
Common Client Questions: Accountants are fielding numerous questions from clients, such as “Who qualifies as a beneficial owner?” and “Is my business considered a reporting company?”
Some accounting firms prefer to guide clients to specialized BOI reporting services rather than take on the task themselves. This approach allows firms to focus on their core competencies without stepping into legal gray areas that may arise from offering BOI-related services.
Why This Approach?: This strategy helps firms avoid potential issues with state bar associations regarding unauthorized practice of law (UPL), while still providing clients with access to a trusted provider.
Other firms are choosing to avoid direct involvement in BOI reporting due to the complexity and risks associated with the new law. These firms may share educational resources or host events to help clients understand their obligations, but they steer clear of providing BOI services themselves.
Risk Avoidance: For firms already dealing with the busy season, staffing challenges, and constantly changing regulations, adding BOI reporting to their service offerings may be seen as too far out of scope.
Regardless of your firm’s approach, it is clear that accountants will play a crucial role in ensuring their clients meet the BOI reporting requirements. Whether providing full-service filing solutions, referring clients to trusted partners, or simply educating them on the new law, accountants must be proactive to help clients avoid costly penalties.
At FileForms, we are committed to making BOI filing simple and secure for all stakeholders. Our software solution is designed to streamline the filing process, ensuring that businesses remain compliant with ease.
As the BOI reporting deadline approaches, it’s time for accountants to assess their strategy and determine how they will best support their clients.
