BOI: Businesses cite procrastination, lack of clarity for not filing

Most small businesses are not filing required beneficial ownership information (BOI) reports because they are not sure they need to or because they are procrastinating, according to a poll released Tuesday by Wolters Kluwer.

The webinar poll of 4,427 small businesses on Nov. 12 showed 37% are waiting until the end of the year to file and 32% are not sure they need to file. Another 12% said they had not filed because they lack the resources to do so, while 9% do not believe the requirements apply to their business.

The deadline for most BOI reports is Jan. 1, 2025. Willful violations are punishable by a fine of $591 a day, up to $10,000, and two years in prison with similarly serious penalties for unauthorized disclosure.

When asked how prepared their organizations were to comply with the Corporate Transparency Act reporting obligation, 54% confirmed their organizations were in various stages of preparedness, while 32% said their organizations were “not at all prepared.”

Of more than 32 million small businesses required to file BOI reports, 9.1 million had done so as of early December, Wolters Kluwer said. In early November, an official from Treasury’s Financial Crimes Enforcement Network (FinCEN) told an AICPA Town Hall that 6.5 million businesses had filed. Many of those came from new businesses with tighter filing deadlines, said Phil Lam, FinCEN’s beneficial ownership operations and innovation chief.

Filing requirements

Companies created in 2024 have 90 days from their creation date to file BOI reports, while the deadline for companies created before 2024 is Jan. 1, 2025.

Companies founded or registered on or after Jan. 1, 2025, must submit a BOI report within 30 calendar days of registration. Companies must file updated or corrected BOI reports within 30 days of any modifications or updates to their company information or beneficial owners.

AICPA advocacy and resources

The AICPA has written letters about the need to delay the deadline for BOI filing requirements. Most recently, a Nov. 11 letter was sent to leaders of the Senate Banking and House Financial Services committees.

Without a delay, “this country will see millions of small business owners become accidentally and unknowingly delinquent in their compliance,” said the letter, signed by AICPA CEO Barry Melancon, CPA, CGMA.

The AICPA previously wrote to FinCEN, seeking extensions because of hurricanes, and to Congress, calling on legislators to suspend the BOI reporting rule.

The organization also created a BOI reporting resource center.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.