Breaking Down BOI Reports with Frank Tumminello
Oct 16, 2024In the latest episode of "Keep What You Earn," Shannon explores the new Beneficial Ownership Information (BOI) reporting requirements with Frank Tumminello, co-founder and CEO of File Forms. This new mandate requires nearly all U.S. small businesses to disclose ownership details to the Financial Crimes Enforcement Network (FinCEN) to enhance transparency and combat financial crimes like money laundering and tax evasion.
Businesses must report their beneficial owners—individuals owning 25% or more of the business or those with significant control, like C-suite executives. The necessary details include personal identifying information about these owners and entity-specific details.
Frank emphasizes the significant penalties for non-compliance: $591 per day, up to $10,000. Although FinCEN may not aggressively target small businesses, the risk of these penalties makes timely compliance crucial. Unfortunately, many businesses and legal professionals are procrastinating, especially with upcoming holidays and deadlines.
Shannon stresses the educational role of practitioners and CPAs in this context. Many accountants are already juggling multiple roles, including managing PPP loans. While CPAs are valuable, not all handle BOI filing, pushing the responsibility onto business owners. Surprisingly, the BOI filing process can be quick—taking as little as 20 minutes for single-member LLCs with a clear understanding of beneficial ownership.
To aid businesses, File Forms offers resources like industry-specific blogs and a guided filing solution on their website. Frank advises businesses to over-disclose beneficial ownership information to avoid penalties, as there's no penalty for over-disclosing.
Staying compliant involves ongoing efforts. New entities formed from 2024 have 90 days to file their BOI reports, shrinking to 30 days in 2025. Technological solutions are invaluable here. File Forms offers features like reminders, notifications, and a secure dashboard that can be shared with CPAs and clients for collaborative compliance management.
File Forms' mission-driven approach aims to help businesses stay compliant. They offer services including annual reports, company formation, and EIN applications, acting as a central hub for compliance-related information. The FinCEN portal, while user-friendly, does not monitor or store information, making ongoing compliance challenging. File Forms steps in with a well-rounded solution offering secure communications and updates tracking.
Navigating BOI reporting can be daunting, especially for newcomers. While experienced professionals might find the process straightforward, support services like those from File Forms enhance confidence and reduce errors. For businesses with multiple entities or complex structures, such support becomes indispensable. Frank highlights the value of reminders for updates, simplifying compliance through innovation.
As the year progresses, understanding and complying with BOI reporting is non-negotiable for small businesses. Leveraging educational resources, technological solutions, and professional support can ease the process. This episode equips business owners with the knowledge needed to stay compliant, avoid fines, and focus on growth.
Frank Tumminello comes from a decade-long background in the financial services and technology industry. Prior to FileForms, he was an investor, acquirer, and value-creation resource in several family-owned, operated financial services, insurance, and healthcare businesses throughout his private equity, corporate development, and investment banking career.
Businesses can take our free quiz to determine if they are a reporting company: https://apps.fileforms.com/boi/qualification
Website: www.fileforms.com
LinkedIn: https://www.linkedin.com/company/fileforms/
What you'll hear in this episode:
03:38 U.S. regulating shell companies to prevent financial crimes.
08:34 Resourceful site, practitioners must spread awareness quickly.
11:20 Misunderstanding about deadlines led to unnecessary urgency.
13:36 When unsure, prioritize over disclosing substantial control.
16:46 Beneficial owners ultimately responsible for reporting compliance.
19:25 FinCEN guidance: Quick initial filing, needs maintenance.
23:14 People need confidence and support with tax submissions.
27:59 States maintain autonomy despite Corporate Transparency Act.
31:02 Filing window shortens from 90 to 30 days.
33:28 File forms simplify compliance, prevent costly penalties.
If you like this episode, check out:
Clearing Constraints in Your Business
Exploring Alternatives to Capital Fundraising for Your Business
Why Is It Hard to Find a Good Tax Pro?
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.
