Business advocacy group seeks destruction of millions of BOI records

A small business advocacy organization that sued over beneficial ownership information (BOI) reporting requirements asked the federal government to destroy BOI reports filed before the government dropped the requirement for domestic entities.

In a letter dated April 9 and addressed to Treasury Secretary Scott Bessent, the National Federation of Independent Business (NFIB) said the U.S. Financial Crimes Enforcement Network (FinCEN) “should not use or disseminate, and should destroy, BOI that FinCEN already collected from millions of domestic reporting entities” before the government said in March that reports were required only for foreign companies doing business in the United States.

FinCEN, which administers BOI reporting under the Corporate Transparency Act, Title 64 of P.L. 116-283, issued an interim final rule on March 21 that removed the requirement for U.S. companies and persons to report BOI.

In its letter, the NFIB asked Treasury to add language to the interim final rule to require FinCEN to destroy millions of BOI reports it had received. In November, FinCEN estimated that reporting companies had filed an estimated 6.5 million BOI reports.

“Congress should take immediate action to make this relief permanent and prevent small businesses from being subjected in the future to these burdensome and invasive reporting requirements,” Jeff Brabant, NFIB vice president of federal government relations, said in a news release. “Furthermore, we ask Treasury to destroy the personal and private information that many small businesses had already provided, to ensure it does not fall into the wrong hands for nefarious use.”

A Treasury spokesman declined to comment on the NFIB’s letter.

The NFIB, with its 300,000 members, is the largest plaintiff in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478 (E.D. Texas 12/3/24), which challenged BOI reporting requirements.

Before the change in reporting requirements, FinCEN had estimated that 32 million small businesses would need to file BOI reports. Since the rule applies now only to foreign entities, that number is estimated at less than 12,000, Melanie Lauridsen, the AICPA’s vice president–Tax Policy & Advocacy, said on a recent AICPA Town Hall.

AICPA advocacy

The AICPA and state CPA societies wrote numerous letters to Congress and FinCEN urging a delay in the BOI reporting deadline. The AICPA regularly updates its 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.