Newsletters

December 2024 - Monthly Newsletter

In this month's newsletter, we give an important update on the new BOI reporting requirement for US companies.

Key Upcoming Federal Filing Due Dates:

There are no key filing dates for individuals during the month of December.

Expat taxpayers who filed a tax return extension had until October 15, 2024 to file their federal income tax return. In certain cases, a further extension may be granted by the IRS to December 16, 2024 if, for good reason, October 15 did not provide sufficient time to file the tax return.

Important Update - BOI Reports for US Companies

Background. The Corporate Transparency Act (signed into law on January 1, 2021) expanded anti-money laundering laws and created new a federal reporting requirement called a beneficial ownership information (BOI) report for certain companies doing business in the US.

Beginning in 2024, many small businesses are required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN) in an effort to create a national database for use by national security and law enforcement agencies to prevent the use of shell companies for criminal activity.

While we generally do not assist with these reports (they are not tax forms and they are not required annually), given the newness of this requirement and the steep potential penalties for non-compliance (up to $10,000 and potentially imprisonment), we have dedicated this newsletter to updating you on this topic.

BOI Reports. Beginning in 2024, US reporting companies (and certain foreign reporting companies) are required to file BOI reports. A company is considered a reporting company if a document was filed with the secretary of state (SOS) or similar office under US state law to create or register the entity. US corporations (including S corporations), US LLCs, US limited partnerships, and other entities formed through the SOS are subject to the reporting requirements. But, because sole proprietorships, trusts, and general partnerships do not require the filing of a formal document with an SOS, they generally are not considered a reporting company and will not have a filing requirement. (While not common amongst our clients, we note that foreign companies are also required to file reports if they are registered with an SOS or similar office under US state law.)

Important Update!

On Tuesday, December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas, Sherman Division, issued an order granting a nationwide preliminary injunction, which suspended the BOI requirement until further notice.

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies are once again required to file beneficial ownership information with FinCEN.

However, because the Department of the Treasury has recognized that reporting companies may need additional time to comply given the period when the preliminary injunction was in effect, the new reporting deadlines are as follows:

  • Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
  • Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
  • Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
  • Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
  • Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.

For more information, you can visit the FinCEN website - https://fincen.gov/boi.

This month's expat tax blogs.

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