Articles & Alerts
New Information Reporting on the Horizon for Small Businesses
The Department of the Treasury’s Financial Crimes Enforcement Network (also known as FinCEN) recently released proposed regulations on a new information reporting regime for small businesses designed to fight money laundering, terrorism, and corruption. While this information is not a tax filing obligation, we thought it important to bring to your attention.
Once regulations are finalized, certain businesses will have to develop a tracking and reporting mechanism to comply with these new information reporting rules.
Who must file?
Generally, a reporting entity is a company or business, including corporations and partnerships, required to register with the secretary of state where they are formed. There are over 20 exceptions to the filing requirements, the most prominent being entities that (i) employ more than 20 full-time people in the United States (U.S.), (ii) filed federal income tax returns showing more that $5,000,000 in receipts, and (iii) are operating at a physical office located in the U.S.
What needs to be filed and when?
A reporting entity must report information about itself as well as its “beneficial owners.” The information on beneficial owners includes their name, address and a unique identifying number such as a driver’s license or passport number. Information must be reported within certain time periods of the final regulations being issued, formation of an entity or change in information about its beneficial owners. In some cases, reports must be filed within 14 calendar days of an event occurring.
The following link to FinCEN’s website may be helpful for you to determine your future filing obligations:
If you have any questions, please contact your Anchin Relationship Partner.