BOI penalties increase while reporting rules remain on hold

As legal challenges to the reporting rules for beneficial ownership information (BOI) wind their way through the courts, inflation adjustments again increased the civil monetary penalties for violating those rules.

The penalties are included in the annual final rule issued by the Financial Crimes Enforcement Network (FinCEN) that provides the list of inflation adjustments of civil monetary penalties within FinCEN’s jurisdiction.

The increases, posted last month in the Federal Register, are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, P.L. 101-410, as amended.

The penalties for BOI reporting violations and for the unauthorized disclosure or use of BOI are each increased to $606 a day from $591, effective Jan. 17. The original fine was $500.

FinCEN has estimated that the BOI rules cover 32 million small businesses.

The penalties were established in 2021 when the Corporate Transparency Act (CTA), P.L. 116-283, an anti-money-laundering initiative that mandates BOI reporting, became law. FinCEN’s regulations for the CTA were not yet effective, so the penalties were not initially published until 2024, when BOI reporting requirements originally were mandated.

Those requirements since have become mired in various court cases, including two in Texas where judges issued nationwide injunctions prohibiting the enforcement of the BOI rules. The Supreme Court stayed the injunction in one case, but it remains in effect in the other, meaning FinCEN is not currently enforcing BOI reporting rules.

In a motion filed Wednesday in the second case, Samantha Smith and Robert Means v. U.S. Department of the Treasury, No. 6:24-CV-336 (E.D. Texas 1/7/25), the Department of Justice said FinCEN would consider changes to BOI reporting requirements if the court grants the government’s request for a stay of the nationwide injunction in a Texas case.

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