The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) provided additional guidance under the Corporate Transparency Act (CTA) by updating its Beneficial Ownership Information Frequently Asked Questions (FAQ) on April 18, 2024, to include new questions and updated information about reporting companies, beneficial ownership through trusts and access to beneficial ownership information, among other topics.

The additional guidance consists of 16 questions where FinCEN either updated prior guidance or provided additional questions and responses that were not previously included in the FAQ.

The two updated FAQs relate to the following:

  • Determining the identity of the beneficial owner of a reporting company. (Question D.1)
  • Calculating the penalties individuals face for violating beneficial ownership information (BOI) reporting requirements. (Question K.2)

The 14 newly issued FAQs consist of:

  • Do the BOI reporting requirements apply to S corporations? (Question C.8)
  • If a domestic corporation or limited liability company is not created by the filing of a document with a secretary of state or similar office, is it a reporting company? (Question C.9)
  • Who is the beneficial owner of a homeowners association? (Question D.13)
  • Can beneficial owners own or control reporting companies through trusts? (Question D.14)
  • Who are a reporting company's beneficial owners when individuals own or control the company through a trust? (Question D.15)
  • How does a reporting company report a corporate trustee as a beneficial owner? (Question D.16)
  • What address should a reporting company report if it lacks a principal place of business in the United States? (Question F.12)
  • A company that was created or registered before January 1, 2024, and was exempt from the BOI reporting requirements loses its exempt status between January 1, 2024, and January 1, 2025. How long does the reporting company have to file its initial BOI report? (Question G.6)
  • If the size of a reporting company fluctuates above and below one of the thresholds for the large operating company exemption, does the reporting company need to file a BOI report? (Question L.7)
  • I work at a federal agency. How can I request BOI from FinCEN? (Question O.2)
  • Which state agencies can request BOI from FinCEN? (Question O.3)
  • Can foreign governments access BOI? (Question O.4)
  • How should authorized recipients prepare to receive, store and use BOI? (Question O.5)
  • Although financial institutions subject to customer due diligence requirements are not currently required to access the beneficial ownership IT (BO IT) system, what are the current supervisory expectations if they choose to access BOI from the BO IT system when access becomes available to them? (Question O.6)

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Duane Morris is actively monitoring developments regarding the CTA and issuing Alerts on the topic. Duane Morris will provide advice to clients related to CTA compliance only when explicitly engaged to do so in writing.

For More Information

If you have any questions about this Alert, please contact Thomas R. Schmuhl, Jocelyn Margolin Borowsky, Joel N. Ephross, Bruce H. Jurist, Hope P. Krebs, Lee J. Potter Jr., any of the attorneys in our Corporate Transparency Act Group, the attorney in the firm with whom you are regularly in contact, or Michael A. Gillen or any of the professionals in the Tax Accounting Group.

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