Starting next year, a vast number of small businesses will need to submit a BOI report to the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of Treasury. It is essential to be aware that non-compliance may result in significant civil and criminal penalties, which could even lead to imprisonment.

The BOI reporting requirement is an anti-money laundering initiative enacted through the Corporate Transparency Act, P.L. 116-283, in 2021 that mandates BOI be reported to FinCEN. The requirement would apply to most companies.

The BOI reporting a critical step towards implementing the Corporate Transparency Act, which will help the Treasury Department and FinCEN expose bad actors abusing the U.S. financial system by hiding their identity behind opaque corporate structures.

Do You need to File?

If your business is a corporation (S corp or C corp) or a limited liability company (LLC), you may need to file a BOI report, unless you qualify for an exemption. Key factors include whether you had to file any documents during the formation of your company with the secretary of state or similar offices. The Corporate Transparency Act outlines 23 exemptions, including criteria like having over 20 full-time employees and more than $5 million in gross receipts.

Filing Date?

Reporting companies created or registered on or after January 1, 2024, will have 30 days after receiving notice of their company’s creation or registration to file their initial BOI reports. Reporting companies created or registered to do business before January 1, 2024, will have additional time — until January 1, 2025 — to file their initial BOI reports.

What needs to be Reported?

Beyond basic business details, the BOI report mandates the inclusion of personal information for each beneficial owner of the company. A beneficial owner can be any individual with substantial control or ownership (at least 25%) over the reporting company. Specific details such as names, birthdates, home addresses, and more are required.

Updates and Corrections

Should there be any changes in the reported details or if inaccuracies are identified post-submission, you have a 30-day window to update or correct the information with FinCEN.

The Small Entity Compliance Guide

The Small Entity Compliance Guide, which FinCEN posted Monday, describes each of the BOI reporting rules provisions; answers key questions; and provides interactive checklists, infographics, and other tools to assist businesses with compliance.  The guide addresses six key questions for complying with the BOI reporting rule:

• Does my company have to report its beneficial owners?
• Who is a beneficial owner of my company?
• Does my company have to report its company applicants?
• What specific information does my company need to report?
• When and how should my company file its initial BOI report?
• What if there are changes or inaccuracies in reported information?

The Small Entity Compliance Guide:
BOI Small Compliance Guide (fincen.gov)

In Technical Advice Memorandum 2022-01 (TAM), California's Franchise Tax Board (FTB) examined the scope of P.L. 86-272's protections, especially in the context of online activities and remote work. This memorandum largely mirrors the Multistate Tax Commission (MTC)'s prior guidelines and concludes that various online activities can make a taxpayer ineligible for the protections under P.L. 86-272. Such disqualifying online activities include offering after-sales support via chat or email, accepting branded credit card applications, taking in job applications for non-sales roles, and installing cookies on users' devices.

For those of you who are not familiar with P.L. 86-272, it is a federal law preventing a state from imposing a net income tax on any person’s income derived within the state from interstate commerce if the only business activity performed in the state is the solicitation of orders of tangible personal property; such orders are sent outside the state for approval or rejection; and the orders, if approved, are filled by shipment or delivery from a point outside the state.

The TAM also stipulates that regular telecommuting from California would void these protections, unless the in-state activities are solely supportive of sales of tangible personal property. Businesses with websites or remote workers in California should critically evaluate how the TAM affects them, particularly if they currently depend on P.L. 86-272 protections or are subject to California's income tax apportionment throwback rule.

California is the pioneer state to enforce the MTC's definitions of protected and non-protected internet-based activities, applying its interpretation retroactively. States like New York, New Jersey, and Oregon are contemplating similar moves, although California's interpretation has already faced legal challenges from the American Catalog Mailers Association.

The future remains uncertain regarding how many states will adopt the MTC's updated guidelines and whether they'll enforce them retroactively or going forward. The evolving interpretation of P.L. 86-272 adds complexity for both states and taxpayers, limiting its original protective scope even further.  Taxpayers should engage in diligent review and planning to navigate these shifting tax obligations.

Link to TAM 2022-01  Technical Advice Memorandum 2022-01

IRS에서는 2024년 1월 1일부터 사업체가 Form 8300, 10,000달러 초과 현금 지급 보고서를 전자 방식으로 제출하도록 의무화하는 IR-2023-157을 발표했다.

10,000달러를 초과하는 현금을 수령하는 비즈니스의 경우 미국 정부에 거래를 보고해야한다. 대부분의 현금 거래는 합법적이지만, Form 8300에 제공된 데이터는 탈세, 불법 마약 거래, 테러리스트 자금 조달 및 기타 범죄 활동에 대처하는 데 도움이 될 수 있다.

Form 8300은 현금을 수령한 다음 날로부터 15일 이내에 제출해야한다. 이 기한이 주말이나 공휴일인 경우 다음 영업일에 제출해야한다.

Form 8300의 새로운 전자 제출 요건은 Form 1099 시리즈 및 Form W-2와 같은 다른 정보 보고서를 이미 전자 방식으로 제출하도록 의무화된 사업체에 적용된다. 전자 제출 및 커뮤니케이션 옵션으로의 전환은 IRS와의 상호 작용을 간소화하기 위해 고안되었다. 2024 회계연도부터 Form 8300 이외의 정보 보고서를 10개 이상 제출해야 하는 사업체는 모든 Form 8300(및 해당 연도에 필요한 기타 특정 유형의 정보 보고서)을 전자 방식으로 제출해야한다.

Form 8300을 정확하게 정시에 제출하지 않을 경우 과태료가 부과될 수 있다. 제출 지연 또는 부정확성에 대한 합리적인 사유를 입증하지 못하면 벌금이 부과될 수 있다. 현금 보고 요건을 고의 또는 고의로 무시하는 경우 최소 25,000달러의 벌금이 부과될 수 있다. 또한, 신고를 회피하도록 유도하거나 유도하려고 시도하는 경우, 중대한 누락이나 허위 진술이 포함된 신고서를 제출하는 경우, 신고를 회피하기 위해 거래를 구조화하는 경우에도 벌금이 부과될 수 있다. 이러한 위반 행위는 형사 기소될 수도 있으며, 개인은 최대 5년의 징역 또는 최대 25만 달러, 법인은 최대 50만 달러의 벌금 또는 두 가지 모두에 처해질 수 있다.

아래 링크를 클릭하면 IR-2023-157을 열람할 수 있다.

Businesses must electronically file Form 8300, Report of Cash Payments Over $10,000, beginning January 1, 2024 | Internal Revenue Service (irs.gov)

The Internal Revenue Service issued IR-2023-157 mandating that businesses must electronically file Form 8300, Report of Cash Payments Over $10,000, effective January 1, 2024.

For businesses receiving cash amounts exceeding $10,000, reporting transactions to the U.S. government is required. While most cash transactions are legitimate, the data provided on Forms 8300 can aid in combating tax evasion, illicit drug trade, terrorist financing, and other criminal activities. Timely, accurate, and complete submissions on Forms 8300 can often enable the government to trace funds linked to such unlawful activities.

Forms 8300 should be filed by the 15th day following the receipt of cash. If this due date falls on a weekend or holiday, the filing should occur on the next business day.

This new e-filing requirement for Forms 8300 is applicable to businesses that are already mandated to electronically file other information returns like the Forms 1099 series and Forms W-2. This shift to electronic filing and communication options is designed to simplify interactions with the IRS. Commencing from the calendar year 2024, businesses must e-file all Forms 8300 (and certain other specified types of information returns required for that year) if they are obligated to file at least 10 information returns other than Form 8300.

Noncompliance with the accurate and punctual filing of Form 8300 may result in penalties. Failure to demonstrate reasonable cause for filing delays or inaccuracies could lead to penalties. Intentional or willful disregard of cash reporting requirements may incur a minimum penalty of $25,000. Penalties can also be imposed for inducing or attempting to induce a business to evade filing, submitting a report with material omissions or misstatements, or structuring transactions to avoid reporting. These violations might also face criminal prosecution, potentially resulting in up to 5 years of imprisonment or fines of up to $250,000 for individuals and $500,000 for corporations, or both.

Clink the link below to view IR-2023-157.

Businesses must electronically file Form 8300, Report of Cash Payments Over $10,000, beginning January 1, 2024 | Internal Revenue Service (irs.gov)