US Business Filing Requirements: Update

1: Important Update on the BOI Reporting Requirement: Do Not Ignore!

In April 2024, Gingerbread Tax wrote about the new Beneficial Owner Information Reporting requirements. These were set to take effect on December 31, 2024. The purpose of the BOIR requirement is to eliminate ownership privacy in opaque business structures behind LLCs.

The BOIR is a new US federal reporting requirement.

Like many new laws in the US, the Corporate Transparency Act, which supports this requirement, faced court challenges. These cases questioned the federal government’s right to collect private data. This was particularly relevant since states and the IRS already collect much of this information when income tax returns are filed.

With several cases filed, a court injunction was issued on December 12, 2024. It temporarily halted enforcement of this law. As a result, owners of US LLCs could avoid filing and disclosing their personal information in a BOI Report.

However, last week a judge lifted the injunction. This decision means that from March 21, 2025, LLC owners must file a BOI Report. Failure to comply may result in strict penalties.

What LLC Owners Must Know

Gingerbread Tax specifically wants to inform Australian LLC owners about this development. For clients who subscribe to Gingerbread Tax's renewal service, we include the BOI filing as part of that service. If you prefer to file the BOIR yourself, it’s straightforward. You can file the report directly using this link.

Here are key points you need to know:

• You only need to file the BOI Report once. Do so within 30 days after your LLC is established with the Secretary of State.

• If there is a change of ownership of 25% or more, you must file an update within 30 days of that change.

• LLCs need an EIN to submit the BOI report. The IRS issues EINs to new LLCs, but the process can be slow. If it takes more than 30 days to assign an EIN, LLC owners struggle to comply with the reporting timeframe. We have conveyed this dilemma to the IRS.

• Once you file your BOIR, download and keep the transcript as evidence.

  
  

There are very few exemptions for LLCs that do not need to file:

• Sole proprietors do not need to report.

• Australian entities (e.g., Pty Ltd) who have received an EIN do not need to report.

• LLCs formed before 2020 with no activity since do not need to report.

  
  

Unless you fit one of the above categories, you must report.

• FinCEN does not grant exceptions if your LLC is owned by a trust or corporate structure. You must report the individuals who benefit from the LLC's structure.

• Penalties for non-compliance can include up to two years in prison and USD$500 per day.

  
  

• To read more, check out the FAQs on BOI Report requirements.

  
  

Ongoing Legal Challenges

Legal challenges regarding the constitutionality of the BOI Reporting requirements are still active. There is a possibility they will be addressed at the Supreme Court level. Even if the court does not overturn the act, the new administration may revoke it. However, LLC owners currently do not have the injunction to stop reporting while those cases are pending.

If you engage a tax professional to file your income tax return, they will likely offer to file both your FBAR and BOIR as part of their service. Ultimately, as the LLC owner, you are responsible for ensuring the BOIR is correctly filed by yourself or by your representative.

2: Filing Your 2024 US Income Tax Return

Your LLC needs to report its income to the Internal Revenue Service each year. Even if your LLC had no taxable income, you may still need to file an information return. For most LLCs, the tax year aligns with the calendar year. This means that the due date for reporting 2024 income is March 17, 2025 (for corporations) and April 15, 2025 for LLCs taxed as either partnerships or disregarded entities. If you are not ready to file, we can apply for automatic extensions to avoid late penalties.

If you need assistance with your US income tax return, please contact us. Our tax professionals and business partners are here to help with filing your personal LLC and corporate and sales tax returns. Regardless of your business activities being large or small, simply fill out an income tax request, and we will match you with the best tax return solution to meet your needs.

3: Update on BOI Reporting Requirements

Update March 21, 2025:

FinCEN has announced that it will no longer require US companies to complete the BOI Report. They describe this as their 'interim final ruling.' Here is their latest release. Let the reader understand.

Read more here.