BOI is Officially Dead for Domestic Companies and U.S. Persons

New interim final rule castrates BOI reporting requirements

FinCEN has submitted the new interim final rule for beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA). As promised, the BOI reporting requirement has been drastically reduced and dead for domestic companies and U.S. beneficial owners.

This rule will be effective when it is published in the Federal Register.

Reporting Companies

Domestic reporting companies under the old rule are now exempted, while foreign reporting companies under the old rule must continue to file a BOI report.

Under revised 31 C.F.R. §1010.380(c), a reporting company is now any corporation, limited liability company, or other entity formed under the law of a foreign country and registered to do business in any State or tribal jurisdiction by filing a document with a secretary of state or any similar office under the law of that State or Indian tribe.

In addition, a new exemption was added for any corporation, limited liability company, or other entity created by filing a document with a secretary of state or any similar office under the law of a State or Indian tribe.

Beneficial Owners

Under revised 31 C.F.R. §1010.380(d), reporting companies are exempt from reporting the BOI of any U.S. person, and U.S. persons are exempt from providing BOI to any reporting company.

31 C.F.R. §1010.380(f)(10) defines a U.S. person with reference to I.R.C. §7701(a)(30), which would include both a citizen or resident of the United States. Therefore, reporting companies will only report nonresident alien beneficial owners on their BOI report; if a person loses U.S. resident status, they will become subject to reporting.

BOI Report Deadlines

Any entity that became a reporting company before the date the interim final rule is published in the Federal Register will have 30 days from the publication date to file a BOI report.

Any entity that becomes a reporting company on or after the date the interim final rule is published in the Federal Register will have 30 calendar days from the earlier of:

• The date on which it receives actual notice that it has been registered to do business, or

• The date on which a secretary of state or similar office first provides public notice, such as through a publicly accessible registry, that the reporting company has been registered to do business.

Updated and corrected reports must also be filed within 30 days; this existing rule is unchanged in the interim final rule.

Comments Requested

Comments on the interim final rule must be received no later than 60 days from the date it is published in the Federal Register.

Join the Conversation

As a paid subscriber, you can discuss this topic in the comments section. Please keep the discussion related to this edition’s topic.

Learn More About Tom

Please take a look at my website to learn about the educational opportunities I offer the tax professional community.