BOIR Compliance: The Significance, Impact, and Opportunities!

This article explores how CPAs can leverage TaxBandits' tools and features to efficiently manage BOI reporting for their clients, enhancing service quality and ensuring compliance.

Stephanie Glanville | August 26, 2024 | Read time: 7 minute(s) | BOI Reporting | No Comments

Many small businesses across the United States may soon face penalties from FinCEN. The reason? Failing to properly manage Beneficial Ownership Information (BOI) reporting requirements and missing submission deadlines. Although this report is only mandated for small businesses, the penalties can be steep, and many may find the fines difficult to manage. That’s why timely submission is crucial to avoid these penalties.

In this blog, we’ll explore the significance and impact of the BOI report, as well as the opportunities available to CPAs when filing these reports for their clients.

Significance of BOI Reporting

According to the Financial Crimes Enforcement Network (FinCEN), the Department of the Treasury Bureau estimates that over 32.6 million small businesses are required to file the BOI report. However, only 2 million have done so, leaving a significant gap in compliance. Despite hopes that this requirement might be lifted, it is not going away.

As you may know, the Corporate Transparency Act (CTA) mandates that any business falling under the reporting requirement category must file the BOIR. This legislation was enacted to prevent unauthorized access to funds, as well as money laundering, financial crimes, and serious tax fraud. There is no option to cancel or skip the submission of this report.

Impact of BOI Reporting for Small Businesses

BOI reporting is crucial for businesses to enhance financial transparency and protect themselves from potential legal and financial risks. By submitting the BOI report, businesses demonstrate their commitment to upholding high standards and practices, helping them avoid legal complications.

Additionally, meeting these reporting obligations on time allows small businesses to maintain a positive reputation with regulatory authorities, which is essential for long-term growth and success. Timely and accurate BOI filing not only safeguards the business but also strengthens trust with clients, partners, and the community.

Penalties and Deadlines:

Meeting BOI reporting deadlines is essential to avoid penalties and maintain compliance. Deadlines vary depending on the company’s formation date:

Existing companies registered before January 1, 2024: Submit the report by January 1, 2025.
Companies registered on or after January 1, 2024: Submit the report within 90 days of registration.
Companies registered on or after January 1, 2025: Submit the report within 30 days of registration.

Failing to meet BOI reporting deadlines can lead to serious consequences. Penalties for non-compliance include significant fines and potential legal actions that could disrupt business operations. The penalties include:

Civil penalties: Up to $591 per day.
Criminal penalties: Fines up to $10,000 or up to two years in prison.

The Role of CPAs in Managing BOI Reporting for Clients

As mentioned earlier, FinCEN estimates that over 32.6 million small businesses need to file BOI reports, presenting a significant opportunity for you as a CPA. Many businesses are either unaware of the BOI reporting requirements or find the process too complex to manage alone—this is where your expertise becomes invaluable.

By offering your services to assist these businesses with their BOI reporting, you can provide immense value to your clients while creating a new revenue stream for your practice. Each BOI report you handle represents a potential increase in your earnings, and with millions of businesses needing assistance, the opportunities are substantial.

By stepping in to help your clients navigate these new FinCEN requirements, you’re not only reducing their stress but also upgrading the level of service you provide as a CPA. This allows you to build stronger relationships with your clients, ensuring they feel supported and confident in their compliance efforts, which ultimately enhances their overall experience with your practice.

Using TaxBandits to Enhance Efficiency for CPAs

TaxBandits provides a range of tools and features designed to streamline your BOI filing process, allowing you to better serve your clients while also boosting efficiency:

API Integration: Seamlessly integrate our API into your existing system to automate the BOI filing process. This reduces manual work, minimizes errors, and enhances overall efficiency, so you can focus more on your clients’ needs.
White Label Solution: Customize our BOI filing service with your branding, allowing you to strengthen your professional identity. This enables you to offer a personalized solution to your clients while enhancing the value you provide.

In addition to these tools, TaxBandits offers advanced pro features tailored specifically for CPAs. These features give you greater control over your clients’ BOI reporting needs, further increasing efficiency and ensuring compliance. By leveraging these solutions, you can deliver exceptional service, grow your practice, and provide peace of mind to your clients.