BOI reporting evaluations for tax professionals

I conducted parallel searches of authoritative federal and state sources and practitioner summaries to assemble up-to-date, actionable guidance for tax professionals on BOI (Beneficial Ownership Information) reporting evaluations for US businesses (through 2026-01-03). Key findings, practical compliance guidance, deadlines, exemptions, filing process, penalties, and state-level developments (notably New York) are summarized below, followed by recommended checklist/actions for tax professionals and authoritative sources. Summary of key federal developments (FinCEN/CTA): - Scope change (Interim Final Rule, March 26, 2025): FinCEN issued an interim final rule that removes the requirement for U.S. companies and U.S. persons to report BOI under the Corporate Transparency Act (CTA). The revised regulatory definition of “reporting company” now means only entities formed under the law of a foreign country and registered to do business in any U.S. State or Tribal jurisdiction (i.e., foreign reporting companies). (See FinCEN and Federal Register excerpts below.) - Current federal deadlines for (foreign) reporting companies: Reporting companies registered to do business in the U.S. before March 26, 2025 must file initial BOI reports by April 25, 2025. Reporting companies registered on or after March 26, 2025 have 30 calendar days after notice their registration is effective to file an initial BOI report. (FinCEN guidance and IFR.) - Exemptions: The CTA and implementing rules contain numerous statutory and regulatory exemptions (originally 23–24 exemptions enumerated in the rule); the IFR preserves many foreign-reporting requirements while carving out domestic companies and U.S. persons. Tax professionals must evaluate whether a client qualifies under any CTA exemption. (Federal Register/FinCEN guidance.) - Filing method and updates/corrections: BOI reports must be filed electronically through FinCEN’s BOI e-filing system; reporting companies must update or correct reports within regulatory timelines (IFR sets 30-day update/correction windows for foreign reporting companies in many cases). A 90-day safe harbor from penalties exists for voluntary corrections submitted within 90 days of an original deadline in some situations (see Small Entity Compliance Guide). (FinCEN guidance and Small Entity Compliance Guide.) - Penalties/enforcement: Willful failure to provide, update, or correct BOI can result in civil penalties (up to $500 per day) and criminal penalties (up to 2 years imprisonment and/or fines up to $10,000). FinCEN indicates enforcement will consider published enforcement factors and may exercise discretion; voluntary correction policies and safe harbors apply in limited situations. (Small Entity Compliance Guide excerpts.) State-level developments and interactions: - New York LLC Transparency Act (effective January 1, 2026): New York enacted a state-level BOI disclosure law modeled on the CTA that requires filing of beneficial owner disclosures or attestations of exemption for certain LLCs authorized to do business in New York (as drafted the rule primarily targets foreign-formed LLCs in light of FinCEN’s IFR, but the state considered amendments to broaden scope). Key NY features: initial filing windows (30 days after formation/registration for after Jan 1, 2026; Dec 31, 2026 for existing companies), annual filings, electronic filing through NY DOS, $25 filing fee reported in practitioner summaries, and state penalties including daily monetary penalties (up to $500/day), loss of good standing, and potential suspension or cancellation. New York’s rules and filing system and guidance remain an important compliance layer separate from FinCEN. (See Morgan Lewis, Wolters Kluwer, Crowell, and other firm summaries/citations.) - Other states: As of this research, New York is the primary state with a comprehensive state-level LLC transparency registry effective Jan 1, 2026. Tax professionals should monitor state legislative developments in major formation jurisdictions (Delaware, California, Texas, Florida, etc.), and check each state’s secretary of state or department of state guidance for owner-disclosure or annual report changes. Practical guidance and checklist for tax professionals evaluating clients (US business owners / LLC founders): 1) Identify the entity’s formation/registration status and dates: - Was the entity formed in the U.S. (domestic) or formed in a foreign country and registered in a U.S. state (foreign reporting company)? Under the IFR, only foreign reporting companies generally must file with FinCEN. If domestic, current federal BOI reporting to FinCEN is not required per the March 2025 IFR — but state requirements (e.g., NY) may still apply. 2) Evaluate exemptions carefully: - Cross-check statutory exemptions under the CTA and implementing regulations. Common exemptions include large operating companies, certain regulated entities, inactive entities, subsidiaries of exempt entities, and more — each has specific eligibility rules (some foreign-ownership tests apply). Document the factual basis for any claimed exemption; some state regimes (e.g., NY) require an attestation under penalty of perjury. 3) Identify and collect required data for reportable beneficial owners and company applicants: - For reportable individuals: full legal name, date of birth, current address, and a unique identifying number (unexpired passport, state driver’s license/state ID, etc.). For company applicants (for companies created on or after Jan 1, 2024), collect company applicant information where applicable. Consider secure collection protocols and consent where state law requires direct submission of owner data (NY requires owner information entry in state system). 4) Timing and filing: - If client is a foreign reporting company: confirm registration date and file within applicable deadline (e.g., pre-March-26, 2025 registrants had earlier deadlines; after-March-26 registrants have 30 days from notice). For state filings (e.g., NY), follow state deadlines (NY: 30 days after formation/authority filing for new registrants; Dec 31, 2026 for existing entities). Use FinCEN BOI e-filing system for federal filings and the applicable state portal for state filings. 5) Updates/corrections and recordkeeping: - Advise clients to report changes or corrections within regulatory timelines (30 days in many IFR situations) and to keep records supporting ownership and exemption determinations. Maintain client consent and ID documentation securely for the required retention period. 6) Penalties and voluntary correction: - Inform clients about civil and criminal penalties for willful failure or submission of false information. Where errors are discovered, consider voluntary correction within safe harbor windows (e.g., 90 days in certain contexts) and document remediation steps. 7) Coordinate with registered agents, corporate-service providers, and state filing agents: - Many states (e.g., NY) expect filings to be made electronically and may publish FAQs and guidance for service providers. Coordinate filings to avoid duplicate or inconsistent disclosures across federal and state systems. 8) Monitor regulatory changes and litigation: - The federal rule has been modified and was issued as an interim final rule subject to comments and future final rulemaking. New York and other states may amend or expand state-level requirements. Maintain a watch list and subscribe to FinCEN, state DOS, and reputable firm updates. Recommended immediate steps for tax professionals to support clients: - Inventory: create a client roster of entity formation jurisdictions and formation/registration dates. - Triage: mark entities likely subject to federal BOI filing (foreign-formed + registered in U.S. states) and entities potentially subject to state filings (e.g., NY foreign LLCs). Prioritize filings by deadline. - Data collection packet: prepare secure templates to collect owner/applicant data and exemption support; require copies of ID where needed and signed attestations for state filings. - Document retention & compliance memo: prepare written determinations for each client explaining why the entity is or is not required to file BOI (federal and state), the exemptions relied upon, the filing action taken or recommended, and the dates of any filings. - Billing & engagement: update engagement letters to include BOI review and filing services, and allocate time for annual reconfirmations. Primary resources (authoritative) and excerpts used to support the guidance below are listed in the citations section. Use these links for templates, e-filing access, and the full rule text and small-entity guidance. If you want, I can now: (1) draft the requested comprehensive blog post (with SEO meta, slug, excerpt, and state-aware sections), (2) prepare a short newsletter text and subject line for the provided template, and (3) produce a client-ready BOI evaluation checklist and data-collection packet (fillable). Tell me which deliverables to produce first.