Beneficial Ownership Information (BOI) Reporting

What BOI reporting is

The Corporate Transparency Act, enacted as part of the National Defense Authorization Act for FY 2021, requires 'reporting companies' to file Beneficial Ownership Information (BOI) with FinCEN. The reports identify individuals who: • Own 25% or more of the reporting company's equity, OR • Exercise 'substantial control' (senior officer, director with authority over major decisions, important decision-maker). The stated purpose is to combat shell-company misuse for money laundering, terrorism financing, and tax evasion. The reports are NOT public — accessible only to law enforcement and certain federal agencies.

The 2024-2025 litigation timeline

BOI reporting has had an unusually turbulent rollout: • 1/1/2024 — Reporting begins for all in-scope domestic and foreign entities. Initial deadlines: pre-2024 entities by 1/1/2025; new entities within 90 days of formation. • 3/1/2024 — NSBA v. Yellen (N.D. Ala.) holds CTA unconstitutional as applied to plaintiffs. • 12/3/2024 — Texas Top Cop Shop v. Garland nationwide preliminary injunction. • 12/23/2024 — Fifth Circuit stays the injunction. • 12/26/2024 — Fifth Circuit reinstates injunction. • 1/23/2025 — Supreme Court stays the 5th Circuit injunction; another district court injunction immediately re-imposes a nationwide stay. • 3/21/2025 — Treasury publishes interim final rule narrowing scope to foreign reporting companies only, exempting US-formed entities and US persons. • 2026 — Status remains an interim final rule subject to further rulemaking and potential legislative change. Always verify current FinCEN guidance at fincen.gov/boi before filing or assuming exemption.

Who is a 'reporting company' (pre-2025 scope, partially restored if rules change)

Under the original rule: any corporation, LLC, or similar entity created by filing with a state secretary of state (or registered to do business in the US if foreign-formed). 23 categories of exemption — most notably: • Large operating companies (>20 full-time US employees + >$5M US gross receipts + physical US office) • Public companies • Banks, credit unions, registered investment advisers • Most tax-exempt 501(c) organizations • Inactive entities (in existence ≥1 year, no foreign-owner, no asset/activity) The single-member LLC of a self-employed person filing Schedule C was originally in scope — the exact target the political backlash focused on.

What gets reported

For the reporting company: • Legal name + any trade names / DBAs • Business address (street, not P.O. Box) • Jurisdiction of formation • Taxpayer Identification Number (EIN or SSN for sole props) For each beneficial owner AND (for entities formed on/after 1/1/2024) each company applicant: • Full legal name • Date of birth • Residential address • Unique identifying number from acceptable ID (passport, US driver's license, state ID) + image of that document Alternatively, an individual can obtain a FinCEN ID once and reference it across all entities, saving repetitive disclosure.

Penalties and current enforcement posture

Willful failure to report or providing false information carries civil penalties of $591/day (2026 inflation-adjusted; original $500/day) and criminal penalties up to $10,000 fine + 2 years imprisonment. Under the March 2025 interim final rule, FinCEN has indicated US-formed companies and US persons are exempt and that penalties for past non-filing by US entities during the injunction periods will not be pursued. This is a discretionary enforcement posture, not a statutory amendment — Congress could re-expand scope, or a future administration could reverse position. Best practice for foreign-formed entities doing business in the US: file. For US-formed entities under current 2026 rules: confirm exemption directly at fincen.gov/boi before assuming no obligation.

Worked example: Aspen Bend Holdings LLC (Wyoming LLC, single member, US citizen)

Aspen Bend was formed in Wyoming on 3/15/2024 by Maria Chen, a US citizen and sole member. She is wondering whether she needs to file BOI for 2026.

Pre-litigation rule: yes — Aspen Bend is a domestic reporting company, Maria is the sole beneficial owner (100% ownership + substantial control), and she would also be the company applicant. Initial report due within 90 days of formation. March 2025 interim final rule: domestic reporting companies and US persons exempt → Aspen Bend has no current obligation. Maria's action plan: 1. Confirm current scope at fincen.gov/boi as of 2026 2. Monitor for any rule change or congressional action that re-expands scope 3. If she later forms a foreign entity (Cayman LLC, BVI Ltd) registered to do business in the US, BOI filing for that entity is still required. If the IFR is reversed and US entities are pulled back in, expect FinCEN to publish a new filing window before re-imposing penalties.

Statute references

• Corporate Transparency Act — 31 U.S.C. §5336
• Beneficial ownership reporting regulations — 31 CFR §1010.380
• Initial constitutional challenge — NSBA v. Yellen, No. 5:22-cv-1448 (N.D. Ala., March 1, 2024)
• Nationwide injunction — Texas Top Cop Shop, Inc. v. Garland, No. 4:24-cv-478 (E.D. Tex., December 3, 2024)
• March 2025 interim final rule — Treasury, 31 CFR §1010.380 (Interim Final Rule, March 21, 2025)

Related pages

• LLC vs S-Corp Election Guide →
• Schedule C Guide →
• About TaxKiln →