The Mississippi Society of Certified Public Accountants has joined AICPA and dozens of other state CPA societies to ask the Financial Crimes Enforcement Network (FinCEN) to extend and expand the deadline for beneficial ownership information (BOI) reporting requirements, specifically for Reporting Companies Created or Registered in 2024. The beneficial ownership information (BOI) reporting requirement requires small businesses, including small CPA firms and LLCs, to report information on the “owner” of an entity.

Effective January 1, 2024, existing companies, companies created or registered before January 1, 2024, will have one year, through January 1, 2025, to file their initial BOI reports. New companies, companies created or registered on or after January 1, 2024, will have 30 days to file their initial BOI reports. If there are inaccuracies in the initial BOI report filed or companies have a change in information, such as change in residential address or percentage of ownership, they will have 30 days to report changes or correct the inaccuracies.

The BOI reporting requirement is an anti-money laundering initiative enacted through the Corporate Transparency Act (CTA) in 2021, which mandates that BOI information is reported to (FinCEN).

In a comment letter, sent October 30, 2023, the profession specifically recommended that FinCEN extend the deadline from the proposed 90 days to one year and expand the applicability of the deadline to include not only new entities created in 2024 but ALL entities created thereafter, as well as entities making updates or corrections to their original filings.

Lack of awareness is highlighted in the letter, citing that most businesses are not familiar with the new BOI regulation, despite the campaigns put in place to inform them. The time and financial burdens on small businesses were also mentioned as a potential result of not instituting the recommended changes. The comment letter also hopes to avoid the steep taxpayer penalties that could accompany unawareness of the new reporting requirements.

“MSCPA has joined the AICPA and other state societies to call for improving BOI reporting requirements,” said Karen Moody, MSCPA President/CEO. “We believe that extending and expanding these reporting requirements will have a beneficial impact on taxpayers, small businesses and our members, who are serving as their trusted advisers.”

CALL TO ACTION
On December 12, 2023, the U.S. House of Representatives passed H.R. 5119, Protect Small Business and Prevent Illicit Financial Activity Act, providing a one-year delay to the start of the rule. MSCPA signed the letter to the House urging passage of the bill. Now, the U.S. Senate must take up this bill by December 31 or small businesses and the financial professionals who serve them will be working to navigate this new reporting requirement without clear guidance from FinCEN. Call our two U.S. senators and urge them to pass H.R. 5119 as passed by the U.S. House of Representatives before the end of the year!