BOI Reporting, Update

[Jim-from-Ohio]

I use Verifyle and as part of being a member of Tax Pro Fellowship, Verifyle is included with the the Tax Pro Fellowship membership.  I received an email from Tax Pro Fellowship this morning and part of that email was a template that can be modified to send to clients informing them of the BOI reporting and what I like at the end was a comment how the BOI is not part of a tax return filing and to seek legal advice on how to file.   There is legislation that has been introduced to delay this law but to date no action has been taken on it. Anyone else see the template?  

[dascpa]

Tuesday I took the business update from Western CPE in Vegas.  Some practitioners said their malpractice carrier said NOT to complete the form for clients.  Others said they would, and the instructors seem to imply they would let the client or their lawyers do this.  No real consensus.  For 2023 and prior entities you have until 01/01/2025 to file.  For 2024 new entities you had 30 days, but it's now 90 days to file.  How many of our clients set up an LLC or other during the year and we find out about it next tax season - way beyond the 90 day threshold? 

As of now I'm going to inform my clients but state I am not preparing these forms.  Many others are including it in the engagement letter.

[IRonMaN]

I've been busy putting out other fires and haven't done much with this outside of following the posts here.  But does anybody know if the gods of rules in the federal government has put any effort into notifying individual businesses that this nonsense is out there?

[dascpa]

Nothing from government.  Only reason I knew is a post on the board previously and my seminar.

Let's start a program, tell no one, and expect you to comply.  Same as Nancy saying let's pass the bill and then we'll read it.

[IRonMaN]

Prisons could be getting awfully full with business owners that know nothing about this law and therefore don't comply. 🤔

[PATAX]

Let us hope that those with common sense rescind this monstrosity before Dr Frankenstein brings it to life.

[BobKamman]

@PATAX   Some are leaving in disgust, but most of the people who voted overwhelmingly to enact it three years ago are still in Congress.  So don't get your hopes up. 

Similar attitude about "know everything about every company" in the UK is causing Barclays, which also does business in the US, to shut down charities that don't fill out the paperwork to their satisfaction.  They blame government regulation:

https://www.theguardian.com/money/2023/dec/09/charities-barclays-frozen-bank-accounts

But tax preparers who are living in some sort of dream world, where they can tell clients "I don't do those, go see a lawyer," need to wake up and smell the coffee.  Your clients' neighbors are going to tell them that their practitioner helped them with it.  If you don't know your client well enough to know who owns and controls the business, perhaps you should not be doing any work for them.  Will anyone be prosecuted for a good-faith effort to comply?  Anything is possible, but after the government has used a machine gun to kill a cockroach, they are going to be out of ammunition to attack the butterflies. 

[PATAX]

@BobKamman well said Bob. I said in another post that if we do not prepare this, then our clients may find another CPA. I know who owns the companies. Like I said in the other post, if I decide to do this for existing applicable entities then I will make sure that the client signs an ironclad agreement that they are responsible, solely responsible, for any penalties that may result, and that they must let me know immediately if there is any change in BOI information. If the government does not rescind this, then hopefully they will reduce the amount of the massive penalties, which is a big problem for many. Also, if there is a change in the future to BOI information, then extend the time period to report the change, especially for companies existing prior to December 31st 2023.

[BobKamman]

@PATAX  All I remember from torts class is that "negligence can't be waived."  That applies to malpractice, so there is no such IronMan ironclad agreement, although you can try to convince people it works that way. 

More information on BOI, and the bills introduced to repeal it (by a couple of guys who voted for it before they were against it -- one of them has already announced his departure from Congress at the end of his term) is here:

https://www.thedancingaccountant.com/?p=4442 

[IRonMaN]

A lot of laws start out with good intentions.  But then elected officials get involved and mess things up.  I would like to use a stronger word than mess, but since this is a family channel, I don't want to get in trouble. 😅

[PATAX]

@IRonMaN You hit the nail on the head. If my memory serves me right, many years ago probably when I was a kid, they passed a law that gas service stations had to replace those old tanks that were in the ground. The result was that many small independent gas service stations ended up closing, because that was just too expensive. Now the question is: Was this law really passed because of good intentions? Did the results of the implementation of this law benefit the large gas/oil companies? The cynical DNA, that I inherited from my ancestor Lajos Von Almassy De Filicz, has me thinking.🤔🐕☝

[IRonMaN]

I'm going to guess that for those voting to pass that, half were concerned about the environment and the other half voted because of the money in their back pocket from large companies.

[Camp1040]

@PATAX 

Assisting you with your compliance with the Corporate Transparency Act, including beneficial ownership information reporting, is not within the scope of this engagement.

Canned statement from "The Tax Book" general engagement letter template.

[Strongsilence-CPA]

FinCen updates

https://public.govdelivery.com/accounts/USFINCEN/subscriber/new

[George4Tacks]

Be sure to sign up for Spidell Flash E-mail, even if you are not in California 

https://www.caltax.com/news/flash-email/2024-01-fincen-releases-beneficial-ownership-information-rep...