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DON'T GET SCAMMED: The Reality of BOI Reporting for Business Owners

The Do's and Don'ts of BOI Report Filing

| TUESDAY, JULY 16, 2024 |

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The Corporate Transparency Act (CTA) passed in 2021 requires almost every business across the United States to file a Beneficial Ownership Information Report (BOIR), and the Financial Crimes Enforcement Network (FinCEN) was instituted to enforce this new reporting requirement. threatening major financial and legal penalties for non-filers. That's a lot of acronyms, and that's just the beginning!

The civil and criminal penalties associated with non-compliance shows just how much the government is taking corporate transparency seriously. They are severe! Failing to file your BOI report on time can lead to $591 per day fines, and willful neglect can lead to 2 years in prison. These are very real and very intimidating penalties, and the worst part is – most business owners are completely unaware of this!

*Since you're reading this, you can pat yourself on the back for being in the loop. Be sure to spread the word and share this with the business owners you know so they're not caught off guard!

| A Perfect Opportunity for Scammers

Unfortunately, the severe consequences the government is threatening to enforce compliance can be used as scare tactics by scammers to charge hundreds of dollars in exchange for filing the BOI report for the business owner. We recently interviewed the owner of a non-profit who said they paid $500 to have their BOIR filed, and they were actually exempt from filing altogether!

Third parties can file BOI reports on behalf of a business, and it often makes sense for these businesses to outsource this work so they don't have to stop what they're doing to figure it out. However, a legitimate company will first verify that the business is required to file and if so, charge much less than $500.

Don't let these predators scare you into paying them a bunch of money! There are several cost-effective resources out there to help you navigate this process.

| Does Your Business Have to File?

You're probably wondering, "is my business required to file a BOI report?"

Odds are the answer is yes. The vast majority of businesses are required to file this report, with very few exceptions. That being said, you're going to want to find out for sure. There are a few ways to go about doing this:

Take this handy quiz!
Download a free, step-by-step guide to BOI reporting.
Call a business compliance expert for a free consultation – this option is our favorite, because each business is unique! Speaking to an expert is the quickest and surest way to get answers.
Do your own research to learn which businesses are considered a "reporting company" and the common exemptions. (The guide mentioned in option 2 has all of this info condensed and summarized – very convenient!)

Don't worry, if you click on those links you'll go to a new tab, so you can come back here when you're done and finish reading.

If you're in the 97% of businesses that need to file a BOI report, you can at least take comfort in knowing you're not alone. Here's another comforting fact: many businesses have missed their deadline for filing their BOI report, and we haven't heard of anyone being hit with the $591/day fines yet. Big emphasis on the "yet!" It's only a matter of time before FinCEN cracks down and decided to make examples out of some or all of these businesses.

All things considered, getting your BOI report filed is not that hard. If anything, it just takes a some time. It's definitely not worth paying $500 to a scammer, and it's CERTAINLY not worth gambling the $591/day fines by just ignoring it.

"So how do I get the dang thing filed?!"

I'm glad you asked.

| How To File Your BOI Report

As I was writing this article, I went to FinCEN.gov to look into the BOI filing process. At least, that's what I tried to do. The website wouldn't load, so I asked some coworkers to see if they could get into it – no luck. The website was down!

Since then I have been able to troll the website, so hopefully the technical issues are a thing of the past. It has WAY more information than you'd ever need to know, and it's kind of anxiety-inducing thinking of all the nuances of business ownership. If you're a real go-getter with nothing but time on your hands, you could probably sift through all of that info and figure out how to file it yourself. Heck, some people do their own taxes too.

But if you're like me, you'd rather someone else handle it so you can spend time doing things you actually care about, like generating revenue for your business or spending time with your family. Luckily for us, there are good, legitimate options out there that will file your BOIR for you without charging an arm and a leg. I've done some research and compiled the prices I was able to find from the top businesses offering this service, and there's a clear winner:

LegalZoom
FinCen Advisors
CorpNet
H&R Block
Others
DIY

Propel

$149
$99
$99
$99
$99+ (pay extra per owner)
Free, but is it worth the headache?

$69 – Multiple owners included.

Here's a link to Propel's BOI reporting service.

| The Gift That Keeps on Giving

We've got some good news and some bad news. The good news is, the BOI report is not an annual report. Yay! The bad news is, every time your business information or beneficial owner information changes, an update needs to be filed with FinCEN within 30 days. As if this weren't enough of an unwelcome burden to small business owners already! The government sure loves its red tape.

I talked to Darin, the president of Propel's accounting and compliance division, about his thoughts on this new government-mandated BOI report. Here's what he had to say:

"This new requirement is catching a lot of small business owners off guard because it's outside the normal scope of what they are used to hearing about and required to file in the past. For instance, if you get married and your name changes as a result - you may need to re-file. If an owner makes certain changes in company management, or moved their family to a new home are among just a few of the reporting requirements ... yet another thing piled on top of small businesses to keep track of and comply with ... or risk heavy fines."

Darin Edwards

President of Propel Small Business Accounting and Compliance