UPDATED 12/27/24 – BOI Reporting Requirements Reinstated – Earliest Filing Deadline Now January 13, 2025

Dec 27, 2024

UPDATE 12/27/2024: BOI Whiplash? Fifth Circuit Reverses Course, Blocks BOI Reporting in reversal decision, read the full NFIB article here!

On December 23, 2024, a federal court of appeals lifted the injunction on the Corporate Transparency Act (CTA). Effective immediately, the Act’s BOI reporting requirements are reinstated.

In response to the court’s ruling, FinCEN has recognized the need for additional time to comply, therefore granting a 12-day extension so that most BOI filings are now due by January 13, 2025.

FINCEN issued the following alert:

In light of a December 23, 2024, federal Court of Appeals decision, reporting companies, except as indicated below, are once again required to file beneficial ownership information with FinCEN. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline as follows:

  • Reporting companies that were created or registered prior to January 1, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
  • Reporting companies created or registered in the United States on or after September 4, 2024 that had a filing deadline between December 3, 2024 and December 23, 2024 have until January 13, 2025 to file their initial beneficial ownership information reports with FinCEN.
  • Reporting companies created or registered in the United States on or after December 3, 2024 and on or before December 23, 2024 have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
  • Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.
  • Reporting companies that are created or registered in the United States on or after January 1, 2025 have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.
  • As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.

For general information regarding the CTA and BOI reporting requirements being reinstated, please refer to William Vaughan Company’s BOI Insights & Resource Hub.

Categories: Tax Compliance


What the Recent Injunction Against the Corporate Transparency Act (CTA) Means for Your Business

Dec 05, 2024

On Tuesday, a federal court in Texas issued a nationwide injunction prohibiting the enforcement of the Corporate Transparency Act (CTA). The CTA, which was set to require an estimated 32.5 million companies in the U.S. to report sensitive information about their beneficial owners (BOI) to FinCEN by January 1, 2025, is now on hold due to constitutional concerns.

What Does This Mean for You?

The court’s decision means that companies are no longer obligated to meet the January 1, 2025, BOI reporting deadline or comply with related CTA requirements. While this provides immediate relief, the ruling is not necessarily final. The federal government is expected to appeal, and higher courts, including the Supreme Court, may weigh in.

For now, the CTA’s enforcement is paused. However, the broader legal battle is likely to continue, and the final outcome remains uncertain.

Our Recommendation

We advise clients to remain proactive:

  • Continue Gathering Information: If your business falls under the CTA’s reporting requirements, we recommend you gather the necessary BOI information. Preparing now will help ensure compliance should the injunction be lifted or the requirements reinstated. Check out our BOI Insights & Resource Hub for details.
  • Stay Informed: Legal and regulatory landscapes can shift quickly. We will continue to monitor developments closely and provide updates as the situation evolves.
  • Be Ready to File: While enforcement is currently halted, the best course of action is to be prepared to submit your BOI report promptly if needed.

The implications of the Corporate Transparency Act injunction go beyond compliance and touch on broader concerns about federal authority and privacy. Rest assured, we are here to guide you through these changes and keep you informed. If you have questions or need assistance navigating these requirements, please get in touch with a member of our BOI reporting team at wvco.com/contact-us.

Categories: Tax Compliance


Moore v. United States: The Supreme Court’s Tax Dilemma

Dec 13, 2023

In the world of taxes, all eyes have been on the Supreme Court and the case of Moore v. United States. What makes this case so monumental, you ask? It’s not every day that the Supreme Court hears arguments around tax laws affecting individuals, much less a high-stakes case that could redefine the meaning of taxable income.

Supreme Court

At the heart of Moore v. United States is a provision of the Tax Cuts & Jobs Act (TCJA) enacted in 2017, requiring companies to pay taxes on foreign profits that had previously been untaxed. This mandatory repatriation tax is now being called unconstitutional by one Washington state couple.

In 2005, Charles and Kathleen Moore invested $40,000 in KisanKraft, a farm equipment retailer based out of India. The couple alleges that they never received any foreign profit payments from the company because all such profits were reinvested by KisanKraft. The Moores argue that such “unrealized gains” are not actually income and therefore should not be taxed. Their case argues that the TCJA provision violates apportionment requirements under the 16th Amendment because it allegedly taxes them on ownership of personal property — in this case, their KisanKraft shares — rather than on realized or received income.

While the Moores are simply seeking a refund of the one-time $15,000 increase in their tax bill due to the change in the law, the case carries much broader implications. A ruling in their favor could threaten other provisions of the tax code. The Justice Department has also noted that a ruling by the Supreme Court invalidating the mandatory repatriation tax could cost the U.S. government $340 billion over the next decade. That amount could grow exponentially if the decision invalidates other tax provisions as well.

While a ruling is not expected until June of 2024, some justices have signaled the possibility of upholding the tax by attributing the income earned by the foreign company to its shareholders. William Vaughan Company’s tax team is closely monitoring updates in the Moore v. United States case. Be sure to subscribe to our insights as we continue to share any breaking news on the ruling.

Categories: Tax Compliance


Beneficial Ownership Information (BOI) Reporting Requirements

Oct 23, 2023

What is BOI Reporting?
Beneficial Ownership Information (BOI) Reporting is a framework developed by the Financial Crimes Enforcement Network (FinCEN) that mandates certain businesses to disclose specific information about their “beneficial owners.” The new reporting guidelines were formed as an effort to enhance financial transparency and curtail illicit financial activities by illuminating the individuals who own or control certain foreign or domestic entities registered to do business within the U.S.

Who is Required to Report Beneficial Ownership Information?
Domestic companies required to report include corporations, LLCs, and other similar entities formed through the registration with a secretary of state or similar office. Certain entities, such as large companies with over 20 million dollars in revenue, those that employ more than 500 full-time employees, and entities that operate under extensive regulatory scrutiny, among others, may be exempt from BOI reporting. In total, there are 23 types of entities exempt from reporting requirements, making it extremely important to carefully review FinCEN’s qualifying criteria, (published in their Small Entity Compliance Guide,) before concluding that your company is exempt.

Key Reporting Elements Defined

  • Beneficial Owner(s): the FinCEN defines Beneficial Owners as individuals who own or control (either directly or indirectly,) at least 25% of the ownership interest in a reporting company, or hold “substantial control” over the company.
  • Substantial Control: according to the FinCEN, an individual holds substantial control over a reporting company if the individual meets any of four general criteria:
    • The individual is a senior officer;
    • The individual has authority to appoint or remove certain officers or a majority of directors of the reporting company;
    • The individual is an important decision-maker; or
    • The individual has any other form of substantial control over the reporting company.
  • Required Reporting Information: includes the name, date of birth, address, and an identifying number (e.g., a driver’s license or passport number) of each beneficial owner, as defined above.
    Reporting Timelines
  • Existing Entities: Business that were formed as of January 1, 2024, must submit an initial BOI report by January 1, 2025.
  • New Entities: Those businesses created or registered after January 1, 2024, must report within 30 days of creation/registration.
  • Updates: Any changes or updates to a business’s BOI structure must be reported within 30 days of occurrence.

How to Report Beneficial Ownership Information
BOI reports must be submitted electronically through FinCEN’s secure, online filing system, which will be accessible starting January 1, 2024. FinCEN is currently not accepting any beneficial ownership information reports.

Next Steps

  • Identify and verify Beneficial Owners: Ensure you have accurate, verifiable information for all individuals who hold a significant interest or control in your company.
  • Understand your reporting obligations: Dive into the specifics of what information needs to be reported and acquaint yourself with the reporting formats and guidelines included in the Small Entity Compliance Guide linked above.
  • Engage Professional Assistance: Consider connecting with WVC’s team of tax advisors who continue to remain on top of BOI reporting mandates to ensure accurate and timely filing.
  • Stay Informed: Sign up for WVC Insights to receive regular updates and additional guidance on BOI reporting guidelines to ensure your business maintains continuous compliance.

Concluding Thoughts
Complying with BOI reporting requires businesses to exercise diligence in maintaining accurate records, understand the mechanics of the reporting framework, and exhibit punctuality in submissions. Strategic partnerships with professional experts can help pave the way for seamless compliance and fortified financial transparency.

Ensuring that your business is well-prepared to successfully navigate both BOI reporting mandates and other critical tax updates is William Vaughan Company’s top priority. Connect with a trusted WVC tax advisor today to see if your business qualifies to report on Beneficial Ownership Information under the updated framework.


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Categories: Tax Compliance


New 2023 TPSO Tax Rules: Key Changes to eBay, Ticketmaster Sales

Oct 10, 2023

Understanding Tax Implications of Reselling on eBay, Ticketmaster, and Other Platforms

In an era where online third-party settlement organizations (TPSOs) such as eBay, Ticketmaster, and Venmo have become commonplace, it’s crucial to be aware of the evolving tax landscape. Traditionally, the net income from these transactions have been considered taxable income. Starting this year, the American Rescue Plan of 2021, will now also require TPSOs to file Form 1099-K with the IRS and provide a copy to the payee if sales on their platform exceed $600. This blog provides insights to the 2023 TPSO Tax Rules and how you may be impacted.

What information should be retained?
To start, you will want to keep track of any and all sales transactions completed using TPSOs. These can be used to confirm the accuracy of the 1099-K received. Additionally, any expenses related to the sale of the tickets or merchandise should be retained. This includes the receipt from the original purchase of a resell item, any fees associated with using third-party platforms, and any shipping or delivery fees.

Will my personal TPSO transactions be taxable?
Since many consumers use TPSOs for personal transactions such as gifts or bill-splitting among roommates, the 1099-K received from the TPSO may include business and personal transactions combined. By keeping a log of all resale transactions, the taxpayer can avoid being taxed on a personal transaction. If there are several transactions and the taxpayer finds it difficult to keep track of their transactions, they should consider creating two separate accounts with the TPSO: One for the business transactions and one for their personal transactions. This will help them track transactions and ensure there is no confusion when it comes to filing with the IRS. Additionally, using detailed descriptions attached to each transaction will help with determination of business or personal transactions. Personal transactions should not be included as taxable income, even if the amount reported on the Form 1040 does not match the 1099-K. Documentation to support the personal transactions should be retained for three years from date of file to surpass the statute of limitations.

What will be considered taxable income?
Reportable personal gain is considered taxable income and will include the resale price of all tickets or merchandise on the TPSO decreased by any applicable expenses related to the sale. Since these are considered sale of personal items, only gains are taxable income and personal item losses cannot be used to offset other income. In the case of a personal item loss, the transaction should still be reported to the IRS by reporting the amount received as other income and offsetting this amount under other adjustments as the basis in the personal item.

Planning for increased tax liability due to new 2023 TPSO Tax Rules.
To properly plan for taxes, you can set aside a specific percentage of each sale to ensure you have cash available to pay any applicable tax liability. If you expect to owe taxes, it is worth considering making quarterly estimated tax payments or increasing the amount withheld from a W-2, if applicable. This will help to ensure there isn’t a significant amount of tax due in April and mitigate any penalties related to underpayment of estimated tax.

For more information about these threshold changes, visit the IRS website.

Categories: Tax Compliance