Beneficial Ownership Information (BOI) reporting has begun, which will blindside millions of business owners if it has not already. In fact, the United States government is expected to receive more BOI reports in 2024 than business income tax returns. That’s right – despite almost non-existent public awareness of the Corporate Transparency Act (CTA), the law giving rise to BOI reporting, in 2024, the law arguably has broader reaching implications for millions of businesses nationwide than their filings with the IRS. Delinquent filers may face substantial penalties for missing the reporting deadlines, some of which have already passed.
To help spread awareness and mitigate risk, below is a breakdown of a few quantitative statistics that will catch your attention:
$22.7 Billion Cost to Small Businesses in 2024: According to the Financial Crimes Enforcement Network (FinCEN), the estimated cost of Compliance with the Corporate Transparency Act (CTA) will amount to $22.7 billion for small businesses in 2024. This includes fees associated with preparing, documenting, and reporting beneficial ownership information.
32.6 Million Reporting Companies Expected in 2024: FinCEN anticipates that 32.6 million reporting companies will file a BOI report in 2024. Failure to comply could result in penalties of at least $591 per day.
13.5 Million Business Income Tax Returns Filed in 2023: In contrast to BOI reports, only 13.5 million business income tax returns were filed in 2023, highlighting the broader reach of BOI reporting.
5.5 Million Companies Created in 2023: The number of newly formed businesses has surged, with 5.5 million companies established in 2023, up more than 50% since 2019. Between the gig economy, e-commerce, free-lancer, and side-hustler communities, the number of annual newly formed businesses is expected to continue and accelerate through 2030.
5 Million Changes of Information BOI Reports Expected Annually Until 2034: FinCEN projects they will receive 5 million changes of information BOI reports each year until 2034. This estimate may be understated due to potential growth in new formations and the U.S. population.
450,000 New Businesses Formed Each Month: With 450,000 new businesses formed monthly, non-compliance poses significant penalty risks, potentially amounting to $261 million in a single day or $4 billion within 18 days of the deadline.
14,000 Individuals Follow FinCEN: Despite FinCEN’s efforts to disseminate information on public and social platforms, only 14,000 individuals follow the agency, indicating a lack of awareness among business owners.
$10,000 Fine for Late Reporting: For instance, a business formed on January 1, 2024, would accrue over $10,000 in fines if the 90-day reporting window has passed.
Given these staggering statistics, which have broad-ranging implications, they are important to highlight for those who are unaware of the new law. Most businesses and advisors who initially hear of the CTA assume it does not apply to them, which can be a dangerous and costly assumption. More attention needs to be given to this new law, specifically to U.S. business owners who are consumed with tending to their daily operations, with limited time to allocate towards keeping up with ever-changing federal compliance laws.
FileForms is the nation’s trusted partner for CTA and BOI compliance. We are a mission-driven, US-based business dedicated to providing educational and technology solutions to serve the needs of companies and their advisors who must report a BOI report in the coming months. With our government-approved, award-winning technology platform, we can be your trusted CTA compliance platform, allowing you to offload the risk, avoid penalties, and save time, allowing you to return to running and growing your business. Get started today!
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