February 27th Update – FinCEN issued a notice stating there will be no enforcement action taken against companies that do not meet the recently established March 21st deadline for an uncertain amount of time. The agency is expected to issue an interim final rule before the deadline which will provide comprehensive guidance on filing requirements. Concurrently, it appears that Treasury will also issue proposed rules to limit BOI reporting to foreign companies only.
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Over the last several months, there have been many changes to the filing deadline for Beneficial Ownership Information (BOI) reporting. The requirement originated from the Corporate Transparency Act and is designed to enhance business ownership transparency by requiring a business to disclose certain information to the government to prevent financial and other crimes. Despite the intent, businesses have not reacted favorably citing privacy violations, burden on small businesses, and a host of other constitutional issues. In its latest ruling the Supreme Court issued a stay of the nationwide injunction. This left Denver businesses unclear about when, and if, the BOI reporting requirement would be reinstated.
Last week, on February 19th, there was a new ruling in the case of Smith vs. the United States Department of Treasury, which reinstated the BOI reporting requirement. Based on this, the Financial Crimes Enforcement Network (FinCEN) immediately announced a March 21st reporting deadline. Included in the FinCEN announcement (FIN-2025-CTA1) are details about the deadline, previously issued extensions, and language that allows for an additional changes if necessary. To help clients, prospects, and others, WhippleWood CPAs has provided a summary of the key details below.
New Reporting Deadline
As mentioned above, the new reporting deadline to file and initial, updated, and corrected report is March 21, 2025. There is a possibility there could be another extension depending on whether companies need additional time. However, the language in the announcement is vague and does not guarantee an additional extension is forthcoming.
For those companies that received an extended deadline due to natural disasters do not need to comply with the recent announcement. As outlined in FIN-2024-NTC10, reporting companies impacted by Hurricane Beryl, Debbie, Francine, Helene, and Milton should comply with the originally extended deadline. Of course, submissions prior to the date will be accepted.
Penalties for Non-Compliance
Individuals that willfully violate BOI reporting requirements can be subject to civil penalties of up to $606 for each day the violation continues. The same individual may also face criminal penalties of up to 2 years imprisonment and up to $10,000 in fines. Willful violations include failing to file the report, intentionally filing false or misleading information, or failing to correct previously reported information that is now out of date. It is important to note companies can also be held accountable for failing to file, as well as, senior members of management.
What’s Next?
There are still several legal challenges to the constitutionality of the Corporate Transparency Act pending. Concurrently, new legislation has already passed in the House of Representatives, Protect Small Businesses from Excessive Paperwork Act, which calls for an extension to January 1, 2026, for all companies formed before January 1, 2025. However, it is not clear whether any of these will come into play before the new deadline. For this reason, businesses should immediately assess whether they need to file a report and take the proper steps to prepare a filing.
Contact Us
The new deadline means that Denver companies only have a few short weeks to compile needed information, prepare the report, and submit it to FinCEN. Due to the short timeframe, now is the time to begin these efforts. If you have questions about the information outlined above or need assistance with another tax or accounting issue, WhippleWood CPAs can help. For additional information call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.