Businesses such as limited liability companies (LLCs) and corporations must file a new federal report by December 31. This is the Federal Tax Return Report. beneficial ownership information (Beneficial Ownership Information – BOI), a new requirement that came into effect in 2024.
“This is very serious because by violating the BOI lThe penalty is $500 per day starting January 2025, 2. For this violation, you can face two years in prison and up to $10 in penalties. , explained Carlos Lopez, president of Latin American Tax, Enlace Latino NC.
What is the BOI report
The BOI report is information that identifies the people who own or control a company. It is part of the Corporate Transparency Act (CTA) passed by Congress in 2021, as a new requirement of the Financial Crimes Enforcement Network (FinCen) of the United States Department of the Treasury.
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Who should report?
Most small businesses, including: LLCs and corporations.
BOI Report Submission Deadline
What information must be reported?
- Company information
- Information on beneficial owners (individuals who own 25% or more of the property)
- Information on those who exercise substantial control over the company
Lopez explained that if you registered your company before December 31, 2023, your filing deadline is December 31, 2024. The times are different depending on the year the company was opened.
"If your company was created this year, you have 90 days to file. This deadline will change in January 2025, when companies established after that month will have only 60 days to do so," he added.
What is needed to complete the BOI
Information about LLC
Legal name of the LLC, registered office, date of incorporation
EIN (Employer Identification Number)
Company information
Company name, trade names, company address, PO Box no. and staff.
Information about the beneficiary or the beneficiaries
Name of the owner or owners, if they have more than 25%
Documents: State ID, United States passport, or a valid passport from the country of origin. Consular registration is not accepted.
"Although, if there are multiple owners, only one can complete the process, they must bring all the original documents, not copies, from the other LLC owners," López said.
"Ninety percent of the population falls under this new requirement. But if you have any questions or concerns, we're here to help," he commented.
Reporting Inactive BOIs, Corporations, or LLCs
Carlos also indicated that non-profit organizations and some exceptions do not have to comply with the reporting requirements.
“But if you canceled this year, the BOI form requirement still applies.”
Carlos clarified that if a corporation or LLC was deregistered in 2023, this report is not required to be filed.
"While the IRS doesn't require a business that isn't active to pay taxes, the requirement for this report is that if you have an active business, you must file it," he warned.
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Your immigration status doesn't matter
Carlos also warned that those who registered their business to require their vehicle license plate or because they were planning to start a business "should also fill it out."
Additionally, López explained that the BOI filing is for anyone who has a registered corporation or LLC, "whether you have a Social Security number or ITIN, or whether you are a citizen or not."
“Not to be confused with the report from the Secretary of State”
Important deadlines
- Companies created before 2024: have until January 1, 2025 to report
- Companies created in 2024: they have 90 days from their creation
- Companies created after 2024: they have 30 days from their creation
"If you don't file your annual report with the state, you can file it later or pay to reinstate your LLC. But with the BOI report, you face financial and civil penalties, and you could be charged with a federal crime for nothing," he commented.
"This isn't with the Secretary of State, but with the federal government. This is a very serious matter," he warned.
Carlos López warned that the people in charge of these small companies should not be confused with the annual report that is made to the Secretary of State.
More information
With the deadline approaching, Carlos advised corporation or LLC owners to contact their trusted tax preparer as soon as possible.
"The process is quick. You can also go to the BOI website and download the form, but keep in mind that it's not that easy to complete, and if there's any error, the authorities will classify it as 'negligence,'" he said.
For more information, you can visit the Latin American Tax office, Monday through Friday from 10:00 am to 6:00 pm, located at 1616 North Market Drive, Raleigh, NC, 27609, or if you prefer, call (919) 521-4230.
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