You’re not alone if you have whiplash from hearing conflicting reports on whether BOI reporting is required or not. The original BOI reports were due January 1, 2025, but court cases put that requirement on hold. These cases went as high as the US Supreme Court, but as of February 18, 2025, BOI reporting requirements are back in effect, and so are those penalties.
Bottom line: BOI reports are due March 21, 2025, for businesses which were in existence before January 1, 2025. For businesses formed after February 19, 2025, they will have 30 days from their date of formation in which to file their BOI report.
Penalties: The same original harsh penalties are still in effect. Any business, and its owners, failing to file a BOI report by the deadline will be penalized $591 per day until their report is filed. The same penalty applies if the report is filed with errors. $591 per day until the report is corrected. These are the civil penalties for noncompliance. There are also potential criminal penalties of up to 2 years imprisonment and up to $10,000 for noncompliance. It is well worth it to be certain you file on time and correctly.
At BOI Ally, for less than one day’s penalty, we provide attorney guidance in creating your report and attorney review of your report before it is filed.
How did we get here?
The original Corporate Transparency Act was passed in 2021 by Congress. This law was designed to uncover money laundering and fraud. It went into effect January 1, 2024, and had a deadline of January 1, 2025, for businesses to file an initial Beneficial Ownership Information report. Failure to file, or filing with errors, carried a daily civil penalty of $500 and the potential criminal penalties. The daily civil penalty was raised to $591 per day after an inflation adjustment announced by the Department of Treasury in early 2024.
On December 3, 2024, a federal judge issued an injunction in the Texas Top Cop Shop case preventing enforcement of the BOI reporting requirements. The government immediately appealed this to the court of appeals, the Fifth Circuit. The Fifth Circuit issued an order on Christmas Eve, December 24th, putting the BOI reporting requirements back in effect while the appeal was pending. A couple of days later, on December 26th, the Fifth Circuit reversed itself and put the reporting requirements back on hold and accelerated the appeal so that a decision would be made very quickly.
With the BOI reporting back on hold, the government appealed to the Supreme Court, asking that BOI reporting requirements go back into effect while its appeal was pending before the Fifth Circuit. The Supreme Court agreed with the government and put the BOI reporting back in effect, as of January 23, 2025.
However, in the meantime, another federal judge had issued an injunction prohibiting enforcement of BOI reporting requirements in the Smith case. Because the Smith case was not in front of the Supreme Court, their decision in the Texas Top Cop Shop case did not overturn the injunction by the judge in the Smith case.
Yesterday, February 18, 2025, the judge in the Smith case decided to remove his injunction prohibiting BOI enforcement. This removed the last obstacle to the BOI report enforcement.
As of February 18, 2025, BOI reporting is back in effect and FinCEN issued an immediate update establishing the new deadline as March 21, 2025. The harsh penalties apply if this new deadline is not met.
Which businesses have to file a BOI report?
Corporations, LLCs, limited partnerships, and any other type of entity created by filing with the secretary of state for any US state or territory must file a BOI report unless they are exempt. The largest category of exempt entities is companies with 21 or more full time employees which also had more than $5 million in gross revenue for the past year, as reported to the IRS. Beyond that, the exemptions are rather narrow and we encourage you to run through the free exemption check on BOI Ally.
At BOI Ally, we lead you through legal determinations to determine who in your organization must be listed as a beneficial owner. We guide you through providing all of the information needed to put together a perfect report. Once you submit it to us, an attorney will review the information you submitted, and your report will be filed. There is too much at risk to not take this seriously. For less than one day’s penalty, let BOI Ally help you file a correct report on time.
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