HERES 5 TIPS FOR DEALING WITH THE BOIR
1. What happens if I do not report a BOIR or fail to update, or correct the information within the required timeframe?
If you correct a mistake or an omission within 90 days of the deadline for the original report, you may avoid being penalized. However, you could face civil and criminal penalties if you disregard your Beneficial Ownership Information Reporting obligations.
2. What penalties do individuals face for violating BOIR reporting requirements?
As specified in the Corporate Transparency Act, a person who willfully violates the BOIR may be subject to civil penalties of up to $500 for each day that the violation continues addition to criminal penalties of up to two years imprisonment and a fine of up to $10,000. Potential violations include willfully failing to file a beneficial ownership information report, filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information. It is important to note, that there are other such forms in which the penalties assessed are incredibly grotesque. We expect the same to happen with the BOIR.
3. Can an individual who files a report on behalf of their boss be held liable?
Yes. Along with the actual beneficial owner, an individual who willfully files a false or fraudulent Beneficial Ownership Information Report on a company’s behalf may be subject to the same civil and criminal penalties as the reporting company, and its senior officers.
4. Is the BOIR a tax form?
No, not at all. Your entity need not have any income, nor need to have an EIN in order to be required to file a BOIR. Yet it is expected that the BOIR, like the FinCEN FBAR form, will be administered by the IRS. So in audit situations where the IRS can’t find unreported income, the IRS will look to assess as many BOIR penalties as possible.
5. Is the BOIR constitutional?
Not at all. But the people who get to decide whether or not it is constitutional are on the same team - the Supreme Court is employed by the federal government and typically have no problem with laws that are clearly unconstitutional. The biggest problems associated with the BOIR is that there is no express power granted to Congress to pass this law. For nearly every regulation, the source of government authority comes from the interstate commerce clause. Yet, a state-created entity does not move in interstate commerce. It is purely involved in intrastate activities. Additionally, by mandating the reporting of this form, the government has violated the 4th Amendment Right; declaring against unreasonable search and seizures. Potentially this law could be overruled, and it should be.
The Bottom Line:
There is no value to a file Beneficial Ownership Information Report to the government. The value the government is looking for is being allowed to go after an entity or person with a missing BOIR or an incorrect one. Consequently, the government can easily unleash a penalty bonanza. That's why it is imperative that you get your BOIR filing done correctly.
Our firm with decades of experience filing other FinCEN forms may be your best protection from a government that wants to know everything about you because terrorism in the past has made it possible for the government to do so today.
We understand that navigating the intricacies of tax forms and government forms can be overwhelming, so we're here to assist you! Our team of experts can guide you through the process of choosing the best tax preparation strategy for your situation. We aim at insuring you optimize your tax benefits while minimizing your audit risk.
Remember, taking proactive steps now can save you from potential headaches and financial setbacks in the future!
Don't let the BOIR expose you to unnecessary audit risks!
OUR SUCCESS STORY
It's my pleasure to share a success story with you today. However, this isn't just the story of one single client, but rather it's the collective story of all our clients. Intriguingly, the success story at the heart of it is about our firm's evolution and growth.
Our firm's inception is a tale of familial ambition and tenacity. My father and I, both law school graduates, founded this firm with a shared vision and a mutual passion for tax resolution. Our journey began in 2006, and since then, we have encountered numerous challenges and undergone significant transformations, including the shift to a remote business model.
Initially, our focus was not on current year tax preparation for our clients. Instead, we specialized in filing multiple years of tax returns. We took on the responsibility of not only filing the tax returns but also ensuring they were part of a comprehensive settlement package. This often meant handling six returns at a time, giving us a unique workflow.
In 2009, we branched out into the Offshore Voluntary Disclosure Program, a move that catapulted us into becoming international experts in the field. Our firm takes pride in having filed more disclosures than most other firms. An essential part of our submissions was filing robust returns, especially since we anticipated some of them would undergo audits. I am pleased to share that our diligent work paid off. None of our streamlined disclosures were audited, and those that were audited under the full voluntary disclosure program sailed through without any issues.
However, the journey was not without its challenges. Our firm was initially designed to handle legal issues rather than yearly tax preparation. Despite this, many clients requested that we handle their yearly returns, having gained confidence in our abilities through their problem resolution. The challenge we faced was that we lacked the efficient processes required to handle yearly tax returns swiftly and effectively. This proved to be a source of frustration for both our team and our clients.
Thankfully, our persistent quest for improvement bore fruit. Over the years, we conducted several experiments to enhance our services. Our breakthrough moment arrived in 2020 when we discovered TaxDome, a cutting-edge platform that has revolutionized our approach to tax preparation. After a year of using this platform, we've found it to be an excellent tool, enhancing our services and improving client satisfaction. It's a two-dimensional platform that streamlines communication, document sharing, and client engagement.
TaxDome's efficiency has dramatically reduced our workload, leading to a 54% decrease in our overall working time. This efficiency gain enables us to spend more time addressing our clients' concerns and keeping up with the ever-expanding tax code.
In conclusion, our firm's success story is a testament to our continuous evolution and our commitment to making your tax preparation experience the best it can be. It's a story of learning, adapting, and succeeding – a story of our resilience that we hope can inspire your own path to success.
-Anthony E. Parent, Esq.
Parent & Parent LLP