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CTA BOI Survey for All

PATAX
Level 15

Just wondering what you all are going to do since we are approaching the deadline here in  four months I believe. From what I have seen myself on forums it looks like most CPAs and tax professionals are apparently not going to prepare this, but I may be wrong. I am leaning against it as of now. The 30-day provision to notify when there are changes I believe, the steep ridiculous penalties, and apparent reluctance of some insurance companies to cover this, are just three of the factors that are discouraging me from getting involved with this. If I do not get involved with this then I will be sending a letter out to business clients letting them know that they are responsible for this. If I did get involved with it then I would prepare an iron clad engagement letter separately for this CTA/BOI so I would not be responsible for any penalties. What are all of you guys and girls going to do? Thanks.

1 Best Answer

Accepted Solutions
PATAX
Level 15

Thank you to all for responding. Each will have to make his or her own decision on what they feel is best. And that is the best answer.

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49 Comments 49
TiredFarmer
Level 7

We are leaning towards your thoughts.  We are hoping not but afraid to say never!  (Seems like it always comes back to bite you.)

IRonMaN
Level 15

We are in the process of coming up with a list of who to touch base with to see if they are aware of the requirement.  For those that we feel are bright enough to figure out how to do it, we will be available to assist as needed.  But we have some clients that would struggle if we asked them to spell their name.  For those folks, we will prepare the form for them.


Slava Ukraini!
Jim-from-Ohio
Level 11

I am waiting one more month to see if it gets repealed.  I already have an email drafted up outling the steps businesses need to do to be in compliance.  I will give them a choice, sending them the link to file themselves or if they email a picture of their drivers license I can file it for them.  Fee wise, I have an idea of what I will charge but the amount I was considering keeps going up.

sjrcpa
Level 15

We are not preparing them. We advise clients to:

a.To do it themselves

b.Have their business attorney do it

or c . use one of the companies that do it

The more I know, the more I don't know.
IRonMaN
Level 15

We are batting .500 with attorneys.  I had an attorney call about a client that has several partnerships and asked if we were filing for them.  I asked if they filed the form for their clients and she said yes, so I said it is all yours.  We had another attorney tell the client to have us file it for them.


Slava Ukraini!
sjrcpa
Level 15

I haven't experienced  that, yet    .

The more I know, the more I don't know.
PATAX
Level 15

@Jim-from-Ohio I just read an article about Congress coming back in session this month. The article listed five items at the top of their agenda. The article did not list the repeal of CTA/BOI.

Jim-from-Ohio
Level 11

as of now, looks like it is not going away.

PATAX
Level 15

@Jim-from-Ohio I think I'll be composing a standard letter very soon here and the three options that Sue gave are excellent.

BobKamman
Level 15

It's not going to be repealed, because Congress probably won't even be able to pass any spending bills beyond a short extension, and even then maybe not until after a brief shutdown October 1.  

Some of the opponents remind me of the medieval peasants who never journeyed more than 50 miles beyond their place of birth.  Much of the rest of the free world has enacted stricter rules, including public disclosure of reported data.  Because they believe in transparency.  Mostly, because they think it helps fight terrorism.  If the isolationists gain control of our government, abandon NATO and shrug at threats from the Iranian-Chinese alliance, maybe it will be repealed. But not this year.  

Can anyone name any candidate for federal office, from President on down, who has mentioned this as a campaign issue?  No? I didn't think so.  Grumble as much as you want, and then tell your clients either you're going to help them, or you're not.  

TaxToad
Level 3

I sent out an email to my affected clients in June to give them the information and where they can go to do their filing.  I will not be offering to do these filings.  But I will probably send them a reminder in October.

PATAX
Level 15

@BobKamman I give you a thumbs up for the part that it's probably not going to be repealed.

PATAX
Level 15

@TaxToad I have an existing 1040 client that is going to start a business as of January 1st 2025. He has an attorney taking care of everything, including applying for the federal Ein and the tax ID numbers, which is great. I told him to make sure the attorney takes care of the CTA BOI. I told him more than once. I called him yesterday, and sure enough he said he forgot to tell the attorney about CTA BOI. I have a feeling this is going to happen even if people send out letters and tell them to do it themselves or go to an attorney or a third party that specializes in this. But what do I know?

PATAX
Level 15

Thank you to all for responding. Each will have to make his or her own decision on what they feel is best. And that is the best answer.

BobKamman
Level 15

So some CPA's are worried about this being considered the unauthorized practice of law?  Reminds me of the issue decided by New York's highest court (Court of Appeals) 75 years ago.  From July 20, 1949:

07_20_1949_New_York.jpg

IRonMaN
Level 15

That type of threat doesn’t bother me.  I’ve been practicing law for years and a lot of my legal advice is better than some of our local attorneys.  😉


Slava Ukraini!
Jim-from-Ohio
Level 11
PATAX
Level 15

Thanks Jim for that article. That article mentions the number of BOI reports filed to date is much less than what was expected. They give several good reasons. I think many, if not most, companies still do not know about this. 

Jim-from-Ohio
Level 11

So far I have filed maybe a dozen or two BOI reports.. even filed one for a client that does not have a U.S drivers license but they have a passport.. Generally going smoothly.  Good side business filing these. 

rbynaker
Level 13

@Jim-from-Ohio wrote:

So far I have filed maybe a dozen or two BOI reports.. even filed one for a client that does not have a U.S drivers license but they have a passport.. Generally going smoothly.  Good side business filing these. 


Interesting.  I think the rule is if the document number changes you have to file an updated report.  In VA when you renew your license you keep the same document number (but just get a new issue/exp date) so that would NOT require a BOI update.  But passports are issued with a new number so when the passport is renewed it would have to be uploaded again.  Interesting question though, what if the passport is never renewed?  When it expires I assume there would be a requirement to upload an image of a different valid document instead.

Practically, who's going to keep track of all that?  There's no way (yet?) to retrieve a filed report so unless the filer made a copy of it at the time of filing there's no way to even know what was submitted (and even if it was printed/saved, of course, all of our clients keep these critically important documents forever, right?)

I personally don't see the initial filing as a big deal, I think the big deal is failure to update timely.  Heck, half the time I don't find out that my clients moved until the following year.  A lot of them don't bother changing their driver's license or vehicle registration until something expires.  But FinCEN expects them to do this BOI update in 30 days?

BobKamman
Level 15

In Arizona, a 2005 law required proof of citizenship when registering to vote. (No other state has this requirement.) An Arizona driver’s license was good enough, if issued after 1996, because citizenship was shown on them after that date. The law said that if you had a driver’s license issued before 1996, and were already registered to vote, that was good enough, you didn’t have to register again. But if you weren’t already registered to vote, your pre-1996 license was not sufficient.

Arizona licenses generally don’t expire until you are 65. So, there are a lot of people driving around with old licenses. But if you lost your license, or changed your address and needed a new license, it would be issued with the current date. No proof of citizenship required. But you could still use it to register to vote because no one would know it was really a pre-1996 license.  

They just discovered there are about 100,000 people who have these “new” licenses that were just replacements for “old” licenses, and who registered to vote after 2005 without proving citizenship. They still qualify to vote in federal elections (because federal law doesn’t allow states to require proof of citizenship), but not for state and local races.

There are more Republicans than Democrats in this group, but the Republican county recorder in Phoenix is suing to keep all of them from voting. (He’s a good guy, he’s only doing this to help clear up the confusion.) The state Secretary of State who runs elections, a Democrat, is suing to allow all of them to vote. They hope for a decision before the ballots are printed. (Most people here vote by mail.)

I know, this is not tax-related, but it’s sort of BOI-related, because I don’t have this problem with updating driver’s licenses and you do. But as you point out, even an updated address requires BOI reporting.

 

PATAX
Level 15

@Jim-from-Ohio at seminar today someone stated that they believed that the average fee to prepare this initial BOI report is approximately $300 to $500. Obviously no scientific survey has been done yet of the average fee. 

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PATAX
Level 15

@rbynaker 👍does anyone actually believe that terrorists are actually going to file this report? I would imagine that most terrorists entities and Criminal entities do not stick around for very long, and are fly-by-nighters? Therefore the question must be asked, why wasn't there a grandfather provision for companies that have been in business for years? You know like Grandma Jones antique store?

rbynaker
Level 13

@PATAX I think they're just taking the "Al Capone" approach.  We can't actually catch you for all of the illegal stuff you're doing but at least now we can fine you $10K for BOI evasion.

BobKamman
Level 15

@PATAX  By the same logic, we shouldn't be required to have license plates on our cars, because terrorists don't own cars or keep them very long.  Why should we have to show that our cars are legal, just because it helps law enforcement narrow down the number of suspicious vehicles to those that don't have a plate?  

I was driving across the California desert earlier this week and listening to one of those weird radio stations with "religious" programming and a preacher who said cell phones are just one more step in putting the "mark of the devil" on our foreheads.  Or something like that.  Two-step verification is diabolical.  But I don't have a problem with letting the FBI or Interpol know I am the real person behind my business entities, just like I don't have a problem with letting the Highway Patrol know who owns my car.  It's a free country, though, at least for another couple months, so you can disagree. I won't consider you a terrorist, or even someone who eats cats.  

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PATAX
Level 15

@BobKamman Why do we not require everyone to register exactly who is living in their home, apartment, farm, etc, and require them to report within 30 days when someone moves in or out of that home or farm, just in case there is a terrorist lurking in farmer Smith's barn?😉

BobKamman
Level 15

@PATAX  That form of argument is called "reductio ad absurdum."  We are not talking about registering real people.  We are talking about registering the real people who are behind fictitious names.  

I was opposed to FBI and police overreach back when it was dangerous to do that. I would prefer the world to be as libertarian as possible.  But if the overwhelming majority of Congress believes BOI is essential, especially when our foreign policy is to cooperate with other democracies that are fighting terrorism and drug-money laundering in the same way, I will not complain until someone comes up with a better idea.  

Can you name one candidate who has made BOI an issue this election cycle?  As far as I know, not even the guy who says Haitian immigrants come from Haitia has complained.    

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Jim-from-Ohio
Level 11

NFIB supports legislation introduced by U.S. Representative Warren Davidson (OH-08) and U.S. Senator Tommy Tuberville (AL) to repeal the Corporate Transparency Act (CTA). Repealing the CTA will relieve small businesses of beneficial ownership information (BOI) requirements, one of the largest and most burdensome small business regulations.

“Repealing the Corporate Transparency Act is welcome news to small business owners, as the Act contained one of the largest and intrusive pieces of legislation affecting the small business economy in generations,” said Jeff Brabant, NFIB Vice President of Federal Government Relations. “This Act singles out small business owners and subjects them to civil and criminal penalties for simple paperwork violations.”

PATAX
Level 15

@BobKamman wait until more business owners find out about this, after their accountant or someone else informs them,  and then they will be contacting their federal representatives.

PATAX
Level 15

@Jim-from-Ohio Thanks Jim. Widespread opposition from across business sectors, political affiliation, ideologies, etc.

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IRonMaN
Level 15

“Repealing the Corporate Transparency Act is welcome news to small business owners, as the Act contained one of the largest and intrusive pieces of legislation affecting the small business economy in generations,” 

That dude is a little dramatic.  The federal government isn't asking for a DNA sample from every business owner.  We are 9-1/2 months into this thing.  It isn't that big of a deal to complete the process.  This thing isn't as big of a deal as it was when they started putting tracking devices in with COVID vaccines 😜


Slava Ukraini!
BobKamman
Level 15

Davidson? Another right-wing nutcase:  "Strife within the House Freedom Caucus is sparking some members to consider leaving the powerful conservative group after the recent ouster of Rep. Warren Davidson (R-Ohio), multiple senior GOP sources told Axios....The decision to boot Davidson — an early member of the caucus — over his decision to back Chairman Bob Good's primary opponent has some questioning the group's future as feuds between members spill into the public eye.

Tuberville?  Might know which end of a football is up, but not very good at government:  "In his first big interview as a senator-elect, Tommy Tuberville, Republican of Alabama, misidentified the three branches of the federal government, claimed erroneously that World War II was a battle against socialism and wrongly asserted that former Vice President Al Gore was president-elect for 30 days."

 

0 Cheers
Jim-from-Ohio
Level 11

Business groups and others have filed at least six other lawsuits in federal district court challenging the constitutionality of the CTA, but these cases are unlikely to be finally resolved this year as well. 

Jim-from-Ohio
Level 11

So if you did not like those efforts to repeal or the people behind those efforts, the Associated Builders and Contractors, (ABC)  a national construction industry trade association representing more than 23,000 members along with 100 organizations representing millions of small businesses nationwide, sent a letter to Congress strongly supporting legislation introduced by Rep. Warren Davidson, R-Ohio, to repeal the CTA. ABC also calls on Congress to enact the Protect Small Business and Prevent Illicit Financial Activity Act (S. 3625). The legislation, championed by Sen. Tim Scott, S.C., would delay the onerous CTA filing requirements and accompanying jail time and penalties by one year. A similar bipartisan bill sponsored by Reps. Zach Nunn, R-Iowa, and Joyce Beatty, D-Ohio, passed the House late last year 420-1.

Jim-from-Ohio
Level 11

Tim Scott bad also? How about Zach Nunn.. no good?   How about Joyce Beatty, a dem.  The legislation, championed by Sen. Tim Scott, S.C., would delay the onerous CTA filing requirements and accompanying jail time and penalties by one year. A similar bipartisan bill sponsored by Reps. Zach Nunn, R-Iowa, and Joyce Beatty, D-Ohio, passed the House late last year 420-1.

Jim-from-Ohio
Level 11

I don't even mind if it is not repealed.. I am making good money filing these. just offering facts that there are multiple efforts to get this repealed. 

BobKamman
Level 15

Delay is not repeal.  It's more of an endorsement.  If 420 members voted for it, it's even supported by the Freedom Caucus loonies who want to shut down the government over an unrelated issue.  The bill that passed the House --

    Introduced on August 1, 2023, by Representative Zach Nunn, 
H.R. 5119, the Protect Small Business and Prevent Illicit 
Financial Activity Act of 2023, would revert the Financial 
Crimes Enforcement Network (FinCEN) beneficial ownership filing 
deadline for existing small businesses from January 1, 2024, to 
the statutorily mandated two years after the effective date of 
the regulation for initial filing.
    Additionally, it would extend the filing deadline for 
updating beneficial ownership for registered small businesses 
to 90 days, which was shortened to 30 days in FinCEN's final 
rule. Finally, this legislation would close a loophole created 
by FinCEN's filing form notice and comment that would allow a 
reporting company to obfuscate its beneficial owners by 
allowing alternative identification to be submitted.-- 

 

Jim-from-Ohio
Level 11
Delay needed for BOI reporting, says AICPA
AICPA is calling for a delay in the beneficial ownership information (BOI) reporting deadline, warning that "this country will see millions of small business owners become accidentally and unknowingly delinquent in their compliance." Currently, the Financial Crimes Enforcement Network (FinCEN) has received about 6.5m of the expected 32m reports. AICPA highlighted issues such as "lack of clarity" and "unnecessarily tight" deadlines, which hinder small businesses' ability to comply. They advocate for a one-year suspension of the rule to allow businesses to better understand their obligations. Under the Corporate Transparency Act, companies created in 2024 must file BOI reports within 90 days, while those established before 2024 have until January 1st 2025. AICPA has previously sought extensions for filers affected by natural disasters and continues to push for clarity in reporting requirements.
PATAX
Level 15

@Jim-from-Ohio Thank you for that relevant information Jim. Based on the figures that you provided,  it appears that 79.7% of the expected reports have not been filed.

Jim-from-Ohio
Level 11

yes.. still most companies have no clue about it.. my clients do of course!

TaxGuyBill
Level 15

@Jim-from-Ohio wrote:
 
They advocate for a one-year suspension of the rule to allow businesses to better understand their obligations.

 

Four years wasn't enough?  The law passed on January of 2021.  Why do they think extending it another year would change much?

dd4vols
Level 10
Level 10

We probably have about 80-100 clients that will need to file the BOI report. We just sent out a letter to all those clients, highlighting the possible $10k fine, assuring them that it is not a scam, and asking them to provide us with a legible picture of their current driver's license (we don't have many world travelers in rural West Tennessee), by December 1. We briefly mentioned the government intrusion in requiring this, but it must be done (which DOES play to our clientele greatly).

I expect every one of them to provide us with the pic and be ultra glad that I have saved them $10k.  We are bouncing around the $250 price tag...which isn't bad for the real 30 minutes of input time.

 

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IRonMaN
Level 15

The $250 is roughly about $250 more than I charged for the couple that I did.  But they took me less than 15 minutes so that could be why my price is cheaper.  A couple of clients have been in for other things and I took care of the BOI while I had them cornered. 😜


Slava Ukraini!
BobKamman
Level 15

@TaxGuyBill wrote:

Four years wasn't enough?  The law passed on January of 2021.  Why do they think extending it another year would change much?


This is like TSA requiring "Real ID" to board a flight.  Last I heard, the deadline has been extended to May 2025.   But the airlines have enough political clout that they won't allow the government to keep people off planes.  So far no one connected with the new Administration is saying anything about BOI.  Musk's companies are too big to have to register.  

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BobKamman
Level 15

I thought the organization representing Homeowner Associations had a good case, but I see it was not successful in suing for a preliminary injunction. 

https://www.wolterskluwer.com/en/expert-insights/federal-district-court-in-virginia-denies-motion-fo...

Same result in an Oregon case, where the seven individual plaintiffs were arguing, among other reasons, that BOI violates the Fifth Amendment rights of cannabis dealers and undocumented immigrants who own businesses allowed by state law. 

https://scholar.google.com/scholar_case?case=15407035756566698089&q=Firestone+v.+Yellen&hl=en&as_sdt... 

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dd4vols
Level 10
Level 10

@IRonMaN ,Your Heart of Gold is showing!!

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PATAX
Level 15

Per recent news article: "...pave the way for my (President Trump) Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, ...." President Trump said in a statement concerning the new Department of Government Efficiency. Therefore, there is a possibility that cta/boi may be extended or rescinded, but whether this will occur is unknown, and since it is already near deadline, I personally doubt if it will be extended or rescinded.

BobKamman
Level 15

“Dirty money underpins corruption, crime and conflict. It causes immense harm at home and abroad, enabling serious and organized crime and diverting resources needed for vital public services. Public registers, and the scrutiny that they bring, are the best antidote to the scourge of illicit finance. These registers – disclosing the ultimate owners of companies and assets – help us to follow the money and identify wrongdoing. If implemented, registers would bring to an end decades of secrecy . . .This common-sense measure has strong support across the business community as a crucial measure to promote good corporate behavior.”

Well, that’s what our British allies are reading in their newspaper this morning. Congress enacted BOI before the current trend of isolationism in American foreign policy. Soon will we be seeing billboards demanding “Get the US out of BOI and BOI out of the US” ?

https://www.theguardian.com/world/2024/nov/17/open-registers-only-way-stop-dirty-money-crime 

IRonMaN
Level 15

The feds already have your Social Security number since they generate it.  The state already has your drivers license since they generate it.  For those small business owners who file their tax returns properly, the government already knows you own a business.  So there are no dark little secrets to hide --------------------- unless you are involved in criminal activities --------------- so the reporting isn't a big deal.  The biggest problem is the fact that most of these folks have no clue that the reporting requirements are out there.


Slava Ukraini!