AICPA to Congress: Delay needed in BOI reporting deadline

•2024-11-13•7908 views

The deadline for beneficial ownership information (BOI) reports that applies to most small businesses should be delayed, the AICPA said in a letter to congressional committee leaders.

Otherwise, "this country will see millions of small business owners become accidentally and unknowingly delinquent in their compliance," said the letter to the chairs and ranking members of the Senate Banking Committee and the House Financial Services Committee. The letter is signed by AICPA CEO Barry Melancon, CPA, CGMA, and dated Nov. 11.

The Financial Crimes Enforcement Network (FinCEN), which oversees BOI reporting, has received about 6.5 million of the estimated 32 million reports that it expects to be filed, a FinCEN official said last week.

'Lack of clarity' and 'tight' deadlines

"Small businesses should have a reasonable chance at compliance," the letter said. "There is still a lack of clarity and unanswered questions about the reporting requirements, which has held small businesses back from filing. … To ensure small businesses remain above board with federal laws and regulations, we believe the rule should be suspended for at least a year so the small business community can become better informed of their filing requirement."

Other concerns are an "unnecessarily tight 30-day timeline for report amendments and changes," the AICPA wrote, adding that the timeline makes monitoring client information complex for tax professionals who would ordinarily catch changes and updates during annual client meetings prior to clients' annual tax filing. The AICPA also noted additional complexities with staggered delays due to natural disasters.

Filing requirements

Companies created in 2024 have 90 days from their creation date to file BOI reports, while the deadline for companies created before 2024 is Jan. 1, 2025.

Companies founded or registered on or after Jan. 1, 2025, must submit a BOI report within 30 calendar days of registration. Companies must file updated or corrected BOI reports within 30 days of any modifications or updates to their company information or beneficial owners.

Background

Under the Corporate Transparency Act (CTA), P.L. 116-283, which Congress passed in 2021 as an anti-money-laundering initiative, reporting companies must disclose the identity and information about beneficial owners of the entities. For new entities incorporated after Jan. 1, 2024, reporting companies must also disclose the identity of "applicants" — defined as any individual who files an application to form a corporation, limited liability company, or other similar entity.

AICPA advocacy

The AICPA previously has written letters to FinCEN, including a letter in early October seeking extensions for filers affected by recent hurricanes. It wrote to Congress in February 2024 seeking a suspension of the BOI reporting rule.