As many of you are aware, a section of the Corporate Transparency Act mandated that small businesses report information about the business and the individuals in control of it to the federal government.
In an important ruling regarding this mandate, on Tuesday, December 3, 2024, a U.S. District Court issued a nationwide preliminary injunction which temporarily blocks the enforcement of the Corporate Transparency Act, stating that it is likely unconstitutional. However, since the injunction is not permanent, any final ruling will be made after the January 1, 2025, deadline for filing the BOI information, and is likely to be further litigated which means that a final resolution on this will not be known for quite some time.
Despite the injunction, if the filing requirement applies to your business, you will need to decide whether to comply with the filing requirement and to do so by the deadline of January 1, 2025.
The following are some important points to assist you regarding the BOI filing requirement.
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If your business was created by filing a document with a secretary of state, then you will need to determine if the requirement applies to your business.
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Generally, the requirement applies to businesses employing 20 people or less in the U.S. and have reported gross revenue of $5M or less on the prior year tax return.
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There are 23 categories of exempted entities which you can find in the attached guide.
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Penalties for not filing by the deadline may be enforced at $500 per day late up to a maximum of $10,000. Further, willfully failing to report or intentionally filing inaccurate information is a felony, punishable by up to two years in prison.
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If you are uncertain about complying with the Act given the temporary injunction, we encourage you to consult with legal counsel.
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Further information:
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Click here to access the compliance guide which provides detailed information regarding the requirements.
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The BOI E-Filing Site is located at https://boiefiling.fincen.gov/ .
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