CPA Jason Ackerman on Navigating Your Clients’ BOIR Needs
As a CPA or accountant, you might already be familiar with the team at TaxBandits. But did you know their parent company, SPAN Enterprises, hosts its own podcast, The Bandit Room?
On The Bandit Room, you’ll find updates relevant to professionals like you, covering everything from local news in Rock Hill to insights and happenings applicable to business owners and their financial advisors everywhere.
In this special episode, our host Charles chats with Jason Ackerman, a CPA and CGMA from BNA CPA. Jason provides essential information on a new requirement for businesses under the Corporate Transparency Act. He offers his expert insights on the BOI reporting requirement from FinCEN and shares effective strategies for CPAs and accountants to help their clients navigate this new mandate successfully.
Understanding the BOI Reporting Requirement
The Corporate Transparency Act (CTA) mandates that U.S. businesses report their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This requirement aims to enhance transparency in corporate structures to combat money laundering, terrorism financing, and other illicit activities.
Determining Clients’ Reporting Requirments
Jason explained that the requirement applies to a wide range of entities, including corporations, limited liability companies (LLCs), and other similar entities created or registered to do business in the U.S. However, there are some exemptions, such as large operating companies and certain regulated entities.
Information Required
Businesses must report information about their beneficial owners, including individuals who directly or indirectly own or control 25% or more of the company or who exercise substantial control over the company. The required information includes their name, date of birth, address, and an identification number from an acceptable document like a passport or driver’s license.
Challenges Ahead in BOI Reporting
One of the biggest challenges businesses face is awareness. “Many businesses, especially smaller ones, may not be aware of this new requirement,” Jason noted. Additionally, gathering the necessary information and ensuring its accuracy can be time-consuming and complex, particularly for companies with complicated ownership structures.
This is where accounting firms like his own are stepping in to help their clients understand and complete the BOI reporting process successfully.
Role of Accountants and CPAs in BOIR
Accountants and CPAs play a crucial role in assisting their clients with this new requirement. They can inform their clients about the requirements, help gather and report the necessary information, and set up processes to ensure ongoing compliance. “Advising on potential changes in ownership or control that might trigger additional reporting is also essential,” Jason added.
When asked why his firm decided to start assisting clients with meeting this new requirement, he replied, “Our firm is all about client service and how can we service the client better? And we’ve just found that most of the lawyers around here are not doing that. Most other CPAs around here are not doing it. The client has to have someone to go to.”
He also encourages other CPAs and accountants to take the step towards offering their clients BOI reporting services, bringing the conversation back to TaxBandits, “Like you had the first direct connection with FinCEN. So you were the first API integration that actually worked out of all of them.”
He then went on to remark about his firm’s process with TaxBandits, “You have to upload a driver’s license or passport for all the beneficial owners. So we just put in their emails, it sends it to them, it verifies their driver’s license, and puts it back into the software. We might have a client who has ten LLCs. We don’t want to have to type in that driver’s license ten times. We have to do that on the FinCEN website. So you’ve made it so we can just copy that. And the client only has to do it once.”
Steps to Compliance
To comply with the requirement, Jason advises businesses to educate themselves and determine if they need to comply. “If they do, they should start gathering the required information as soon as possible,” he emphasized. Establishing a process for keeping this information up to date is also crucial, as changes in ownership or control must be reported within a specified timeframe.
Final Thoughts
Staying proactive is key. “The key is to start early and stay informed,” Jason advised. Understanding the requirements and timelines and seeking professional advice when needed will help ensure compliance and avoid potential penalties.
Jason closes his thoughts by reinforcing the importance of accountants and CPAs in entrepreneurship, offering advice to the younger generation that is “good with numbers” or “wants to go into business. He explains, “This is the language of business. So if you want to be an entrepreneur, if you want to run your own business, I would do a double major in marketing and accounting because accounting you need to know the numbers and marketing sides. Yeah. So that’s what I recommend.”
Conclusion
Jason Ackerman’s insights on the new BOI reporting requirements under the Corporate Transparency Act highlight the importance of early preparation and ongoing compliance for businesses.
Accountants and CPAs play a vital role in navigating these changes, ensuring that businesses meet their BOIR needs effectively. Stay informed, and proactive, and always seek professional guidance to ensure compliance with this crucial new mandate. For CPAs that see the need for offering BOI reporting services, but are feeling unsure of how to begin the process, reaching out to a provider like TaxBandits is a great option.
To watch the entire episode over on YouTube, click here! For more small business insights from your friends at The Bandit Room, be sure to check them out on Spotify, Apple Podcasts, or wherever you listen!
521 total views, 2 views today
