File farm ownership report by Jan. 1 to avoid penalties
Author
Published
11/4/2024
Thousands of farm entities could face fines and other penalties for failing to report ownership information under new Treasury Department rule.
Time is running out for thousands of farmers who could face steep fines and other penalties for failing to file business ownership information with the federal government.
Most small businesses, including many types of farm entities, are required to file a beneficial ownership information (BOI) with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) by Jan. 1, 2025.
An analysis by American Farm Bureau Federation (AFBF) economists shows more than 230,000 farms are required to file, but government data indicates that with just over two months left to register, less than 11% of eligible businesses nationwide have done so.
In Iowa, just 15.2% of companies subject to the reporting requirements have successfully filed with FinCEN as of mid-October, according to the AFBF analysis.
Businesses that fail to file or don’t update records when needed could face criminal fines up to $10,000 and additional civil penalties of up to $591 per day. Failure to file could also lead to felony charges and up to two years in prison.
Who needs to file?
The Corporate Transparency Act of 2021 requires businesses to register any “beneficial owner” of a company in an effort to combat money laundering and corrupt financial transactions.
Limited partnerships, corporations and LLCs, whether single member or multiple member, are among the entities that must report ownership, which encompasses many farm entities.
General partnerships and sole proprietorships generally don’t have to file beneficial ownership reports.
Farmers are encouraged to contact an accountant or attorney if they are unsure whether they are required to file their business’s ownership information with FinCEN.
A reporting entity is required to provide information such as name, address and taxpayer identification number. For each beneficial owner reported, the entity will be asked to provide the individual’s name, birthdate, address and identifying number.
A beneficial owner is identified as someone who directly or indirectly exercises “substantial control” over the entity or directly or indirectly owns or controls 25% or more of the “ownership interests” of the entity.
Ownership information can be filed electronically on the Treasury Department’s BOI filing page online at www.fincen.gov/boi by Jan. 1, 2025. While this report doesn’t have to be renewed after the initial filing, changes of address, new driver’s licenses or changes of name all require updated filings.
Entities first formed in 2024 or thereafter have 90 days from creation to file the necessary report. Businesses have 30 days to report changes in ownership from previously filed reports.
FinCEN cautioned business owners to be aware of fraudulent attempts to solicit information from entities subject to reporting requirements. The agency emphasized there is no fee to file ownership information directly with FinCEN and warned against clicking links or opening attachments in unsolicited mailings.
Efforts to repeal or delay the filing requirements have been unsuccessful, so business owners are advised to take steps to ensure they are in compliance.
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