BOI Report: Penalties and Charges

Why is Filing a BOI Report Important?

Under the Corporate Transparency Act, businesses are required to report information about individuals who own or control the company as BOI reports to FinCEN. Missing the deadline or filing inaccurate reports can result in serious penalties. For detailed guidance, refer to the General Instructions for BOI Reporting.

When can FinCEN Penalize an Individual or Organization?

FinCEN may impose penalties under the following circumstances:

1. Failure to File: Not submitting the BOI Report by the required deadline.
2. Failure to Correct Information: Not amending incorrect information within 30 days of receiving a notice from FinCEN.
3. Failure to Update Information: Not updating details within 30 days of changes in beneficial ownership.
4. Willful Non-Compliance:
• The individual responsible for filing the BOI Report fails to comply with the requirement to file it.
• The individual responsible for filing the BOI Report intentionally provides false information.
• The Beneficial Owner or Company Applicant delays providing necessary information to the filer, leading to filing delays.
• The Beneficial Owner or Company Applicant provides incorrect information to the filer, resulting in an inaccurate BOI Report.

Who is liable for violating the BOI Report requirement?

FinCEN can hold the following individuals and entities accountable for non-compliance:

• Filers: Individuals responsible for submitting the BOI Report on behalf of the entity.
• Company Applicants: Individuals responsible for providing required details to the filer.
• Beneficial Owners: Individuals who must provide accurate information about their ownership or control.

What penalties can FinCEN impose?

FinCEN can enforce both civil and criminal penalties to ensure compliance with BOI reporting requirements. These penalties highlight the importance of meeting responsibilities and encourage individuals and organizations to stay compliant.

Civil penalties

Civil Penalties apply to individuals or entities that willfully violate BOI reporting rules. The fine can reach up to $500 per day for each day the violation continues. This amount is adjusted annually for inflation(For example: The current penalty is $591), ensuring the penalties remain impactful over time. Non-compliance due to negligence or oversight can quickly become costly, emphasizing the importance of timely and accurate reporting.

Criminal penalties

Criminal penalties are more severe and are imposed in cases of intentional violations. Individuals violating BOIR requirements may face up to two years imprisonment or a fine of up to $10,000 or both. This applies to those who willfully fail to file a BOI report, provide false information, or neglect to update or correct previously submitted details. These penalties highlight FinCEN's commitment to upholding the integrity of beneficial ownership reporting and deterring fraudulent activity.