Beneficial Ownership Reporting and IRA owned LLCs

A Department of Treasury and Financial Crimes Enforcement Network (FinCEN) final rule that implements requirements of the Corporate Transparency Act (CTA), will impose beneficial ownership information (BOI) reporting requirements affecting IRA-owned LLCs.

Entities formed or registered to do business in the United States will need to either (i) confirm that they qualify for an exemption from the CTA’s reporting requirements, or (ii) timely submit a BOI report to FinCEN. A list of exemptions outlined in a FinCEN compliance guide do not appear to include IRA-owned businesses. Entities in existence before January 1, 2024, will need to file an initial BOI report before January 1, 2025. Any entity formed on or after January 1, 2024, will have 30 days to file an initial BOI report.

The BOI report will contain information about two categories of individuals.

• Beneficial owners, or individuals who own or control at least 25 percent of a company or has substantial control over the company. For an IRA-owned LLC, the IRA owner is considered the beneficial owner.
• Company applicants, or individuals who directly file or are primarily responsible for filing the document that creates or registers the company.

Information required will include legal name, date of birth, address, and unique identifying information from a passport, driver’s license, or other document. If an individual has obtained a FinCEN identifier and provided it to a reporting company, the reporting company may include the FinCEN identifier in its report instead of the information required about the individual.

The report will also include company information—such as legal name, any trade names associated with the entity, address of principal place of business, jurisdiction of formation, and tax ID of business.

The willful failure to report information to FinCEN may result in civil penalties of $500 for each day that the report is late, or criminal penalties—including imprisonment for up to two years and a fine of $10,000. Additional details can be found at fincen.gov/boi.