You may have received an email from the Arizona Corporation Commission regarding a new law under the Corporate Transparency Act related to Beneficial Ownership Interest reporting through FINCEN (the Federal government agency Financial Crimes Enforcement Network). This requires owners of entities, including single-member Limited Liability Companies (LLCs), registered with the Arizona Corporation Commission or Secretary of State, or with any similar government body in another state, to register as a beneficial owner with FINCEN. Reporting is done on an entity-by-entity basis, and includes providing identifying information of beneficial owners, including uploading supporting documentation such as driver’s licenses.
Due Dates:
1. Entities formed in 2024 must file their initial reports no later than 90 days after formation. Entities formed on or after 1/1/25 have 30 days to file after formation.
2. Entities in existence prior to 2024 must file their initial reports by 12/31/2024.
3. Any updates or corrections must be reported within 30 days. Examples of updates include company or owner address changes, driver’s license renewals, etc.
Penalties for noncompliance are significant, up to $500 per day.
Note this is not related to income taxes. It is only information reporting. Most clients will be able to self-report. We will not be addressing this issue for clients that require assistance until after tax season. There is concern amongst the CPA community that preparing FINCEN reports may be considered the unauthorized practice of law. We are waiting for the insurance companies, the AICPA and the ASCPA to sort this out. We anticipate that we will be able to assist with any questions.
Helpful Tips for self-preparing your report(s):
To get started, go to the website https://www.fincen.gov/boi
We recommend each beneficial owner set up a FINCEN ID number. Note if an interest is held as community property, as is common in AZ, both spouses will need to register with FINCEN and each will need a FINCEN ID number. The main benefit of obtaining a FINCEN ID number is you upload your identifying information once while getting the FINCEN ID number, as opposed to uploading with each entity report that you file.
The Step-by-Step instructions found here https://boiefiling.fincen.gov/help will walk you through each step of the reporting process. I found these very helpful when filing my own reports.
I found using the PDF method better than the online method. The PDF method allows you to download the form to your computer and complete the report at your own pace. Additionally, for updates or corrections the PDF method allows you to just report the changes, while with the online method you’ll have to re-enter everything.
Please let us know if you have any questions.