H&L Consulting Services Inc.

Beginning January 1, 2024, a significant change is coming that could affect businesses. Whether you are a single-member LLC, small multi-member LLC, small S Corporations, or small C Corporations, you are required to provide detailed reporting on your beneficial owners—the people who own or control these entities.

The new FinCEN reporting applies to many businesses, including any that own rental properties in an LLC.

Small corporations and LLCs are those with
20 or fewer full-time employees. $5 million or less in domestic gross receipts reported on their prior tax return.
A physical U.S. presence.

To ensure compliance, the penalties for willfully violating the Business Ownership Information (BOI) reporting requirements include
Civil penalties of up to $500 for each day a violation is not remedied.
A criminal fine of up to $10,000.
Possible imprisonment of up to two years.
There’s no limit on the number of people who can be subject to these penalties. Both senior managers and corporate entities can be held liable for willful violations of the BOI filing rules, including
Anyone who willfully files a false or fraudulent BOI report on a company’s behalf.
Anyone who willfully provides false information to the filer of a BOI report.
Beneficial owners who willfully fail to file a BOI report or file a false report, including corporate officers, directors, or employees and LLC members and employees.

The new regulations are designed to enhance transparency, making it more difficult to conceal illicit activities through anonymous corporate structures. While your clients operate with integrity, they nevertheless will likely have to file with FinCEN and report any changes within 30 days.

The rules are effective for both new and existing entities in 2024:
New entities have to file within 90 days of formation.
Existing entities have to file on or before January 1, 2025 (which is closer than you think).

Call us at 888-250-5226 for more info.

https://www.tax.ny.gov/

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