September 19, 2024

Have you filed your Beneficial Ownership Information Report (BOIR) yet? Although there are legal challenges to this new rule it is widely expected to be upheld in the higher courts, so it's best to go ahead and file now.

Update: Current Legal Challenges

As of March 2024, the U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act (CTA) is unconstitutional and enjoined the government from enforcing it against the National Small Business Association (NSBA) and its members. The federal government has since appealed the decision to the federal Court of Appeals for the Eleventh Circuit, with oral arguments scheduled for September 27, 2024. A decision is not expected before January 1, 2025, the initial Beneficial Ownership Information (BOI) report deadline.

Despite the ongoing litigation, the Financial Crimes Enforcement Network (FinCEN) is implementing the CTA as mandated by Congress while complying with the court's order. This means that, for now, reporting companies are still required to file BOI reports as outlined in FinCEN's regulations, except for those individuals and entities protected under the court's injunction.

Although an injunction is in place for the named plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), they are the only ones for whom the injunction applies, so you should still file your BOIR.

What is the BOIR?

The Beneficial Ownership Information Report (BOIR) requirement was established by the 2020 Corporate Transparency Act, with reporting obligations taking effect on January 1, 2024. The purpose of the BOIR is to combat financial crimes like money laundering, terrorism financing, and human trafficking by identifying the individuals who own and control companies.

Who Needs to File?

If your dental practice has fewer than 20 full-time employees and generates less than $5 million in annual revenue, you must submit the BOIR. Additionally, if you have other LLCs, such as rental properties or other real estate LLCs you will have to fill out a BOIR for any/all of your LLCs.

Who is Exempt?

Practices with over 20 employees AND more than $5 million in annual revenue are exempt from BOIR filing, as their ownership is already on federal oversight.

Defining Beneficial Ownership

A "Beneficial Owner" is anyone who owns or controls at least 25% of a company. For dental practices structured as partnerships or S-corporations, this includes all partners or stakeholders with a 25% or greater interest.

What Information is Required?

To complete the BOIR, you will need:

• The exact legal name of your practice
• Your Tax ID Number
• Your name, birth date, and a valid photo ID (passport or driver's license)

This information is required for all beneficial owners, so ensure you gather it for any partners or family members with at least a 25% ownership stake. If you own property through an LLC, a separate BOIR will also be necessary for that entity.

How to File the BOIR

The BOIR can be filed online at https://boiefiling.fincen.gov/fileboir. The process takes about 10 minutes and is straightforward. You may also opt to print and mail the form, but be sure to obtain a tracking number to confirm receipt.

When completing the form, indicate this is your "Initial Report" and follow the prompts. You can request a FinCEN ID, which can simplify future updates to your report.

One-Time Filing Requirement

The BOIR is a one-time filing unless there are changes to your entity's ownership. If changes occur—such as a change in beneficial owners, address, or other key information—you must file an updated BOIR within 30 days of the change to remain in compliance.

BOIR Filing Deadlines

• Existing Entities: Practices in operation before January 1, 2024, must file by January 1, 2025. Early submission is recommended.
  
  
• New Entities: Practices created on or after January 1, 2024, have a 90-day window from the date of formation to submit the BOIR. Did you miss your window? If so, just go ahead and file now.
  
  

Need Assistance?

Navigating BOIR compliance can seem daunting, but we are here to help. If you have questions or need further guidance, please reach out. Compliance is more straightforward than it sounds, and we’re here to ensure you have everything you need to stay on track.

Not sure where to start? Contact us today!

References
Collier & Associates Inc. (2024, February 1). The Collier & Associates Inc. Doctors’ Newsletter Volume LII No. 3.
https://www.fincen.gov/boi-faqs#A_1
https://www.wsj.com/articles/small-businesses-must-now-report-ownership-information-to-the-government-but-many-dont-know-about-it-bb13f2b6?mo%E2%80%A6
https://www.nytimes.com/2023/12/07/us/politics/corporate-transparency-act-lobbying.html?searchResultPosition=1