The BOI is Back! Business Owners MUST File or Face $500/Day Penalty

Bois are back, and you've got 30 days to comply.

99% of you of the owners of an LLC or a corporation in America as a small business owner, have to file this report.

It's over 500 bucks a day for failure to file. Yes, I know. A lot of people are like, I'm just going to wait till that Supreme Court case and see if it gets overturned. You're going to have penalties. I mean, you're rolling dice. I'm not using it now. That business didn't go well, or I bought a rental and I sold it. There's nothing wrong now. You still gotta file it.

Yep. Too late.

There's a requirement you have to file.

Welcome, everybody, to the Main street business podcast. Breaking news. The BOI is back on the table. We're talking about it again. It's. I. It may be here to stay. I cannot deal with this. Matt, we're.

Well, we're on. We're on the fourth hump in the roller coaster here of what's going on. So if you've had a little whiplash, you're not alone. But what's going on right now is FinCEN just. Just issued a notice out today stating that Bois are back and you've got 30 days to comply. We're going to dig into that now. Here's why. The latest case that got overturned was this case called Smith vs. Department of Treasury. This was a federal district court case in Texas. Now, a lot of you might have remembered the top cop shop case that went all the way to the U.S. supreme Court, and that one the U.S. supreme Court overturned and said, bois are legal right now, we're not putting this injunction in place. But there's this other case, Smith versus Department of treasury, sitting down in Texas, that still had an injunction in place. That injunction was just lifted yesterday. So now FinCEN came out and said, there are no more orders preventing us from enforcing the BOI anymore. We're back. You need to file the boi.

All right, and what does this mean? Some of you might be thinking, well, what the hell are you talking about? Okay, The BOI is called the Business Owner Information Report. It is being enforced by FinCEN, which is the Financial Crimes Enforcement Network, which is the sister to the irs, if you will, or the brother. I'm not sure which is the sister, brother. Now, if you're a business owner with an LLC or a corporation, 99% of you. We're going to talk about this a little bit more for a moment, but 99% of you, of the owners of an LLC or a corporation in America as a small business owner have to file this report. Now. It's not hard. It's a little invasive, privacy wise for many of you. You're going to hate it maybe, but we've been helping our clients file this over the last six months. Essentially, people were preparing to do this when the first deadline was the end of the year and then it was on and off because different people had been suing the government, saying I don't want to do this. So it's back on. It is required. And when's the deadline, Matt, that business owners must file this?

Yeah, the new deadline. They gave you a 30 day deadline from February 19th. So I guess we're looking at March 19th here or exceeding. Sorry, they're giving you to March 21st, 2025. So that is a new deadline to file a BOI. This is if your prior reporting deadline has already passed. Now the prior reporting deadline, if you had an entity set up before 2024, before January 1, 2024, you had until December 31, 2024 to file your BOI. Well, that deadline went off the table because of these injunctions that are now, all of them removed. There's no more injunctions that you can rely on. You have to file this. Now. I want to make sure you understand what we're saying here. There's a requirement you have to file. There's no case right now. There's a pending order that says you cannot file this. There's a pending case still in the Supreme Court and they could overturn this later, but they're not giving you a pass on that. So you still got to file. You've got 30 days till March 21, 2025 to file this BOI.

Okay, now the penalties are serious if you don't could even include jail time. But what's the daily penalty now?

It's over 500 bucks a day for failure to file.

Yeah, it's brutal. And so let's back up. Maybe we've got your attention now. I know it's a lot to digest. If you really want that roller coaster ride, you can look at a lot of especially Matt, you've been doing some great videos live on your YouTube and you could read article after article. But the bottom line point is, as of today, February 19, 2025, the federal government is requiring every small business owner will give you a few exceptions that might apply to you. And I say might very loosely. I feel 99% of small business owners are having to deal with this. You have to file this report, you can do it yourself. You can go to the FinCEN website, fill it out, we'll tell you what generally needs to be on it. Or we have been providing this service through our law firm or Main Street Business Services. We have two different business entities to help clients set up new entities with a lawyer or just maintain their current entity. You did not have to set up your entity with us in our law firm. But if you have an LLC laying around or a corporation, this is the time to clean it up and either dissolve it or get this filed and get compliant or face these major penalties. So we've got a link down below for Main Street Business Services. You can call on the phone, boom. We're talking 200 bucks. Plus we're going to help you do your minutes, make sure you're good with your state. Anyway, guys, this is a blessing in disguise to get your entity tidied up. So we're there for you with the link there down below. You can call us, talk to one of our paralegals, they'll be on the phone with you in seconds, help you get this done. You can go do it yourself. Not terribly expensive, but terrible if you don't.

Yeah, and we've done thousands of these for clients. It is not the end of the world. Like Mark said, is a little bit of an invasion of privacy. But here's what's going to go on this beneficial ownership report or boi. You are going to put the name of the business, the tax ID and ein. And then you're going to list two different groups of people that are involved in the business. First Group is anyone that owns 25% or more. That person has to be listed on the boi.

The second group with their home address.

With their home address. Now you don't include their social, but you do have to include their government issued id, passport or a driver's license or state ID needs to be uploaded onto this thing. That's the biggest probably pain in the butt.

Yeah, and think of your grandma that may own an llc, but you're the manager, grandma. And let me repeat, anybody that owns it, well, my trust owns it. Then whoever's the owner, the beneficial trustee or beneficiary of that trust, if you have a revocable living trust, you have to look through that to the owner of the trust, if you will, as the owner of the llc. Well, my corporation owns my llc. Then we got to look at the owner of the corporation that owns the llc. You can't hide behind another entity or behind A trust. The government wants to know who owns this. We'll talk policy and why they're doing this later. So that's the owner. So that's the first group owner or who the beneficial owner is. See that keyword?

And we're peeling back all the way down until there's a person that owns 25% or more at the end of the day. So it is your vocal living trust, you and your spouse that are the beneficiaries of it during your lifetime, which is the most common. You two both own effectively 50%. You two are listed as beneficial owners. Now, the second group would be anyone who has substantial control of the business. Now, in your example earlier with Grandma's LLC for her rental property, that you're the manager of the LLC. Well, grandma's being listed as the 25% or more beneficial owner. She owns it 100%. You're listed because you have substantial control as the manager of the LLC. So managers of the LLCs or, or presidents of corporations or officers and companies and corporations, they have substantial control and they need to be listed as well.

And that's their home address and their governmental issued id. So that would be that quote, unquote, maybe invasion of your privacy. Let's digress for one moment too. Can we talk policy? Because some of you are, like, getting pissed. You're like, what the hell? Why are we having to do this? The theory was, now this is theory. Matt and I like to debate this. I'm probably a little more optimistic and hopeful that this may help. But basically the Democrats and the Republicans in a bipartisan bill about three years ago said we are sick and tired of money launderers, child traffickers, drug dealers, scam artists hiding behind LLCs that they set up in Florida or Wyoming on a Monday, rip someone off on a Tuesday, and then shut down the entity or just disappear on Wednesday. It's this LLC thing has been abused. The corporation thing's been abused. People are hiding behind it and ripping people off on the web, phone calls, whatever. The government's like, this has got to stop. So what they said was, if we have everybody that has an entity must register and show who really owns it and who really controls it, we can weed out all the bad actors they hope, and if anybody doesn't report, we have a bigger hammer to hit them over the head with $500 a day. So this is another way of kind of going after, let's say, the Al Capones of the world that were bad guys back in the 20s, killing people or whatever. They went after them for tax evasion. So this is a way for the government to go after bad actors with a, oh, you're not going to file your LLC properly? Well, we'll put you in jail for that, at least, because that's easier to prove. So they're trying to find another way to go after bad actors. Do you buy into it, Matt?

I just think there's a better way to do that than require every freaking small business owner to go in and file this. Okay.

Elliot Ness.

Yeah. Now here, let me say this on the policy side, because this was a big issue. As we were looking at this and the cases were going back and forth, a lot of people thought, I'll just wait till Trump gets in. And his Treasury Department said they're not going to enforce this. Well, this is his Treasury Department. This is their notice saying, we're doing this, guys. And they do think that there's abuse. So if you were betting on not having to do the BOI because you thought Trump was not gonna make you do it, as a small business owner, I hate to say it, you're gonna have to do it. And now this is this public filing. So let's get back to some policy things, because I think a lot of people are like, this is a privacy issue. I don't want to give all this stuff to the federal government. I set up my entity with the state. Entities are at the state level, and I give the state the information. I also got to give it to the federal government. What for? It's not a federal entity. But here's where that information is going. It's going to FinCEN. And it is not a public searchable database. No one can go look up your entity on FinCEN to see who owns it. This is a private held. Private. This is held by the government. They can't even share it with state or other government agencies without a subpoena.

Yeah.

So it is not publicly available. You still are providing it to the government, of course. So that's. That's where this information is going. And then presumably the government is then taking that to make sure they understand who owns what entities. And if they're tracking a money laundering case or something like that, they can see who owns it or find the ones that just aren't complying and aren't doing anything and go chase those down because they must be doing something wrong.

Yeah. And I would another way of looking at this, as I said at the beginning, this is the brother or sister to the irs, which it truly is. It's in the same department, if you will, under the Treasury. So you're. I would want you to feel like your tax return is private. Your tax return cannot go out on the web unless you're the one that shares it. And this is the same concept. So it's going to be tied up in the Treasury Department in a vault somewhere where they're going to start sorting through the ones that didn't file and say, oh, my gosh, this is probably a bad actor. And estimates are now that we have over 40 million LLCs in the country. Now, here's some of the exceptions. Just quickly, if you have more than 25 employees and how much.5 million in revenue, you don't need to file.25 employees, 5 million in gross revenue, you don't need to file. Reason being is they already know who you are. If you've got 5 million in revenue, 25 employees, they know who you are.

And that assumes you're doing a payroll report on your employees and you're filing a federal tax return, which you would be. Yeah. So they. They're like, you're on our radar.

Yeah. Now, if you have not had any activity in an entity, you may think you're off the hook, but, Matt, I'll ask you to give us the date here. But you may say, well, I set up this LLC years ago, or I set it up last year and I'm not even using it. Oop, slow down. This year use rule means you haven't had a bank account, you haven't done a transaction, you haven't touched it, you haven't owned property. When we mean use it. It's been in the drawer, truly. Without even a bank account.

Yeah.

When's the cutoff date on that?

That was before 2021. So if this was an entity you set up in 2019 and you haven't been using it, then you can say, oh, this is the dormant entity. This is the exemption that I can run on because I'm not using the entity anymore. But it's like, well, I set it up in 2023 and. But I'm not using it now. That business didn't go well. Or I bought a rental and I sold it. There's nothing going on. You still got to file it.

Yep. Too late. Yeah, too bad. Now, this is a little Recommendation here from two tax lawyers that have done 10,000 consultations each helping small business owners. If I may. I know you may not want to hear it this way. The blessing in disguise here is this is a chance to clean house. This is time to empty out the junk drawer. You got this junk drawer full of entities and bank accounts and you're like, you know what? I needed to get rid of this entity anyway. Now I need to. If I set it up since 2021, even if I haven't used it, you need to go dissolve it and file the BOI report. Check that box. You're clean, but it's a chance again to get rid of it. You may have a bank account associated with it. These entities oftentimes have annual renewal fees with the state. So just get rid of it. If you set it up before 2021 and you truly haven't touched it, fine, leave it alone, I guess. But if you anything's hanging out there, I'd recommend. This is a time to do an accounting, do an audit of all of the companies you've set up in the last 10 years and just see where they stand. Go to the state website, do a quick search, you know.

Yeah. And I think also for any of you that are just setting up new entities now, or maybe even this year, I mean, used to be you had 90 days to file this, but, well, now you got 30. Actually, the new deadline for 2025, just so you know, if you're just setting up entities now is you got a 30 day, 30 day deadline after formation to get your BOI filed. And so this is a new thing we've already been doing in our law firm for our new clients. We're setting up entities for across the country. We're doing 500 entities a month, you know, and as Mark said, also at Main Street Business Services, where we do compliance for clients, we've already filed thousands of these. I've done over a dozen on my own entities and POIs, so don't be scared of it. I know a lot of people are like, probably thinking, I'm just going to wait till that Supreme Court case and see if it gets overturned. You're going to have penalties. I mean, you're rolling dice. I can't tell you as a lawyer that you can rely on that yet. We had this injunction in the Smith case last week, last month that we're saying there's a legal requirement. You don't have to file it. There's an injunction against FinCEN to enforce it. That is gone now.

Now here's another recommendation. I'm a glass half full kind of guy. You can tell Matt's glass half empty, but a glass half full. Thirsty? Yeah.

Yeah. Okay.

Drink your water over there. Okay. Now here's an I here's another idea that may resonate and help you through this process. At our law firm, as Matt mentioned, we love to do what we call a comprehensive consultation. We build what's called a trifecta. We know that clients that are organized make more money. Clients that are organized are happier, they are more successful, they save money. Deep down, you know this. So if BY and the FinCEN is asking you to get your crap together, you know what, bitch and moan. But at the same token, take it as a reminder that you will be more successful by dealing with this. So if you need, which we love, call the law firm and say, hey, let's do, let's do an organizational look. Look at my last year's tax return. Look at the entities I have. I'd love a trifecta with a plan. By the way, you probably need to get your estate plan done. You don't even have a let's get organized. When you're organized, you're going to live that American dream more successfully. So take this as an opportunity to kick yourself in the butt and get this stuff done.

I love that that glass was helpful and let's just end it there. Okay? Let's just end it there. We want to give you the update, make sure you knew what was required. This is breaking news coming out of the FinCEN and the courts. And we make sure as your source for tax and legal knowledge as we delivered it to you guys is quickly as possible. And for anybody listening, you gotta subscribe to the podcast, you gotta subscribe to our YouTube channels, make sure you're following this stuff and staying up to date on because we're giving you all the strategies on save taxes, protect your assets.

We are your advocate for success in Main Street America. The podcast Main Street Business Podcast, Our company, Main Street Business Services, we truly are here for you. We both own real estate in Main Street America. We have our small little firm with great paralegals and accountants and lawyers. We, we're not going anywhere. We really want to see you succeed and charge affordable prices to help you get there. So we hope this has been helpful. We've got lots of updates, man. We got the IRS getting audited by DOGE right now. We've got a tax legislation in the joint committee with the House and the Senate right now with promising a 3.5 trillion tax break. We will keep you posted on any developments at the IRS building. And with this legislation, it's going to be a busy year and a busy year to be successful. So see you on the backside.