Update on FinCen BOI Reporting Requirements

Although Congress ruled that BOI reporting is deemed unconstitutional, it is not yet canceled. The bill passed says:

The bill extends the deadline for companies to report ownership information to the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). Specifically, existing companies must file their initial ownership report within two years (current regulations require the report within one year). New companies must file their initial ownership report within 90 days (current regulations require the report within 30 days). Companies must report updates or changes in ownership within 90 days (current regulations require companies to report such changes within 30 days). [https://www.congress.gov/bill/118th-congress/house-bill/5119]

Therefore, we suggest if you are a new company to file within the allotted timeframe of 90 days. If we opened a company for you in 2024, we will handle this for you. If your company was created in 2023 and prior, we suggest you consider whether you want to file now or wait a few months to see how the lawsuit settles. Currently, companies registered in 2023 and prior have until the end of 2024. Please contact us if you would like us to file this report for you no later than August 2024.

What is Beneficial Ownership Information Reporting?

You are required to file identifying information about the individuals who directly or indirectly own or control your company with the Financial Crimes Enforcement Network in order to satisfy requirements under the Corporate Transparency Act.

The Beneficial Ownership Information Reporting Rule goes into effect Jan. 1, 2024, and it’s important to understand this new law given the severity of criminal and civil penalties for failure to file, which include imprisonment and fines.

What is the Beneficial Ownership Information Reporting Rule?

The Beneficial Ownership Information Reporting Rule under the Corporate Transparency Act is a new filing requirement of the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury.

The rule creates transparency around company ownership structures and helps the federal government prevent financial crimes and fraud, such as money laundering, corruption, human trafficking, drug trafficking, tax fraud, and fraud against employees, customers, and other businesses.

Beneficial ownership information reporting supports the ongoing focus and efforts of the U.S. government to deter corporations who would hide or benefit from actions that harm others.

Who is a beneficial owner?

A beneficial owner under the Corporate Transparency Act is an individual who directly or indirectly: (1) owns or controls at least 25% of your company’s ownership interests, or (2) exercises substantial control over your business. Common examples of someone that exercises substantial control can include the following:

  • An important decision-maker for the reporting company

  • A senior officer (president, chief executive officer, chief financial officer, general counsel, chief operating officer, or any other officer with a similar function)

  • An individual with the authority to appoint or remove certain officers or a majority of directors (or similar body) of the company

What are the penalties for not filing?

Each business is responsible for filing a Beneficial Ownership Information Report which includes all of the individuals who control or own the business. However, a beneficial owner of a business who willfully fails to follow the reporting requirement and filing rules, or who misleads the Financial Crimes Enforcement Network, will face personal liability in the form of both criminal and civil penalties for noncompliance with the Corporate Transparency Act.

Failure to comply can lead to criminal penalties of imprisonment for up to two years and/or a fine of up to $10,000, and a civil penalty of up to $500 per day.

Even if a reporting company files the report on time, penalties can be imposed if the report does not include the correct information. It is critical that the reporting company’s filing is accurate. We can help you ensure accurate filing with a simplified reporting and filing process, satisfying the relevant law.

When is the Beneficial Ownership Information Report deadline?

The Beneficial Ownership Information Reporting Rule went into effect Jan. 1, 2024, so it’s important to get informed now about how to satisfy the requirements. The deadline varies depending on your date of formation, which we can help you determine, and we can help you stay on top of the process with notifications leading up to your filing deadline.

Generally, business entities formed before Jan. 1, 2024 will have until Dec. 31, 2024 to file. Business entities formed on or after Jan. 1, 2024 will have 90 days after formation to file. Business entities that amend their formation documents on or after Jan. 1, 2024 will have 30 days to submit a new report.

Taking care of this requirement will help you avoid criminal and civil penalties for failing to comply, including imprisonment for up to two years, a fine of up to $10,000, and/or a fine of up to $500 per day.

Meals & Home Deductions for Schedule C

Meals Deductions / For meals to be acceptable by the IRS, the following conditions must be met:

1. The expense is an ordinary and necessary expense under § 162(a) paid or incurred during the taxable year in carrying on any trade or business;

2. The expense is not lavish or extravagant under the circumstances;

3. The taxpayer, or an employee of the taxpayer, is present at the furnishing of the food or beverages;

4. The food and beverages are provided to a current or potential business customer, client, consultant, or similar business contact (Business should be discussed and names should be provided); and

5. In the case of food and beverages provided during or at an entertainment activity, the food and beverages are purchased separately from the entertainment, or the cost of the food and beverages is stated separately from the cost of the entertainment on one or more bills, invoices, or receipts. The entertainment disallowance rule may not be circumvented through inflating the amount charged for food and beverages.

6. Tips are included in the receipts.

7. Alcohole beverages are not deductible expense.

8. Entertainments are not deductible expense (e.g., taking a customer to a show or sport event).

Note1: For business discussions during a meal, you must have a clear business goal in mind, the discussion must be substantive beyond casual conversation, and you must have an expectation of income or benefit to your business from the meeting. The meeting’s main purpose should be business related with the eating of food being incidental or secondary. Note 2: You may also deduct as a business tax deduction the cost of meals for business discussions that occurred before or after the meal. For example, after a lengthy day of negotiating a business transaction you take the associate out for a nice dinner to relax. While eating your dinner nothing is discussed about business. Since these two events are so closely related, the cost of the dinner is deducted as a meals expense. The business discussions before or after the meal must be substantial and closely connected. Note 3: Business owners try to deduct meals they eat while traveling throughout the day. This is not a tax deduction. The theory on this is straightforward- you have to eat regardless of owning a business or not. In other words, your meal is not contributing directly to the operations or success of your business. The IRS is clever- they don’t mind giving you a tax deduction today on something that eventually will result in taxable business income through growth and profits in the future. Note 4: Business meals are low hanging fruit for the IRS. We’ve seen thousands of dollars in tax savings disappear before our eyes during an examination because the client could not demonstrate the business purpose. To not lose an audit, make sure you keep receipts beyond relying on the credit card statement. In addition, keep a log or journal of the person(s) you met with and the topics of discussion. Be very specific. Memories fade, so if you intend to reconstruct this evidence upon receipt of your examination notice from the IRS, think twice. IRS agents are no dummies on meals.

Home Deduction / A portion of the dwelling unit which is exclusively used on a regular basis- (A) as the principal place of business for any trade or business of the taxpayer, or (B) as a place of business which is used by patients, clients, or customers in … the normal course of trade or business, (C) in the case of a separate structure which is not attached to the dwelling unit, in connection with … trade or business.” We highlighted the buzzwords intentionally.

Let’s define these more carefully-

 Exclusive means the identifiable space or room is used only for business purposes (so let’s not have a bed in your home office).

 Regular is a squishier since it is a facts and circumstances evaluation. Spending 4 hours a month selling Etsy stuff online probably won’t win too many arguments.

 Principal place of business was once a hot topic but has been tightened up with this language right out of the tax code- “For purposes of subparagraph (A), the term “principal place of business” includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business.”

 Trade or business has been defined in Commissioner v. Groetzinger, 480 U.S. 23, and reads in part, “to be engaged in a trade or business, the taxpayer must be involved in the activity with continuity and regularity and that the taxpayer's primary purpose for engaging in the activity must be for income or profit. A sporadic activity, a hobby, or an amusement does not qualify.”

 Administrative or management activities include a nice list from IRS Publication 587 such as billing customers, clients, or patients, keeping books and records, ordering supplies, setting up appointments, forwarding orders or writing reports (we list more below). For the part of home used exclusively for business on a regular basis, the following expenses can be deducted for it: rent, mortgage interest, property tax, utilities, HOA dues, insurance and repairs to determine the expense amount to be reimbursed. The part of home can be a percentage of total square feet of the home (e.g., 150 square feet out of $1,200 total square feet, or 12.5%) or based on the number of rooms (e.g., 1 room out of 5 rooms, or 20%. Kitchen, bathroom, etc. will be considered a room).

Source: Taxpayer’s Comprehensive Guide to LLCs and S Corps: 2021-2022 Edition by Jason Watson, CPA Senior Partner and WCG Inc. Certified Public Accountants, Business Consultants

FinCEN Issues Initial Beneficial Ownership Information Reporting Guidance

Immediate Release (obtained directly from FinCen website)

March 24, 2023

WASHINGTON—Today, the Financial Crimes Enforcement Network (FinCEN) published its first set of guidance materials to aid the public, and in particular the small business community, in understanding upcoming beneficial ownership information (BOI) reporting requirements taking effect on January 1, 2024. The new regulations require many corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners—the persons who ultimately own or control the company—to FinCEN.

“The Corporate Transparency Act, through its beneficial ownership reporting requirements, provides the historic opportunity to unmask shell companies and protect the U.S. financial system from abuse by money launderers, drug traffickers, sanctioned oligarchs, and other criminals,” said Himamauli Das, Acting Director of FinCEN. “We are committed to making this transparency process as simple as possible, particularly for small businesses who may have never heard of or interacted with FinCEN before.”

The following materials are now available on FinCEN’s beneficial ownership information reporting webpage, www.fincen.gov/boi:

Additional guidance will be published at www.fincen.gov/boi in the coming months, to include a Small Entity Compliance Guide. Please check back often for more information.

FinCEN will not be accepting any beneficial ownership information before January 1, 2024. Information on how to submit beneficial ownership information to FinCEN will be forthcoming.

Businesses with questions about the upcoming reporting requirements may contact FinCEN at https://www.fincen.gov/contact.

Woman. Life. Freedom.

I think growing up Iranian in America is to have a complicated relationship with your own identity. Sometimes it feels like cultural schizophrenia. I think for me, personally, I always carried a sense of shame of being not quite American enough for my peers and not quite Iranian enough for my family. It was really only during the recent protests that I finally recognized myself as an Iranian woman and I think it is the responsibility of the diaspora to amplify the voices we are hearing in Iran.

I want to give some historical context to the ongoing protests in Iran, how the women of Iran got to be where they are today, and like any history it is a complicated one. We need to start during the Qajar dynasty which ruled Iran from 1794-1925. Briefly summarizing the Qajar rule: despots with despotism – without an army and without the capabilities to enforce power in the more tribal regions of Iran. This weakness allowed for tribal leaders and most significantly, the ulama (Muslim legal scholars) to increase their political base. While the tribal leaders were eventually disbanded by later dynasties, the ulama retained much of their power. During the Qajar era, female trauma existed mostly within isolated villages behind closed doors at home, prohibited from education, training and a social life – women were treated like infants, confined to housework and childbearing and considered slaves and servants to their husbands. Sex segregation was the prevailing policy of the Qajar dynasty with women ordered to walk on one of side of the street when allowed to leave their home. The use of veiled dressing requires a longer and more complicated discussion than we have time for today.

When I was researching violence against women in Iran, I found manifestations of violence in habitual speech – for instance, a common name for a wife was manzel which translates into “home” or pardehneshin “one who sat inside behind curtained windows.” These symbolic acts of violence turn the female body into an object, the ultimate purpose of which was to be given to sexual intercourse. During this period, women were generally fearful of giving birth to female babies which were considered a disappointment and sometimes buried alive inside walls of the home. The place of a woman was therefore that of an enclosure, imprisoned behind or within walls from which they could not easily escape.

From 1905-1911 there was a Constitutional Revolution where the intelligentsia, ulama, merchants and women fought together for their independence and rights (and later women’s suffrage) by revolting against a semi-colonialist state catalyzed by interference from Britain and Russia. Not surprisingly, after the revolution was a success the ulama did not support the women’s suffrage movement, they insisted that women could not reason on their own. Following this betrayal, women distanced themselves from the ulama. In the wake of the devastation to the Qajar throne, with British help, Reza Shah installed an anti-democratic but modernized government. Reza Shah was able to subdue the power of ulama and tribal leaders and enforce secular legal and educational systems and ended tribal autonomy. He dismantled the power of the land owners and transferred large portions of the land to himself (this was ultimately part of his undoing) but it contributed to the rise of a middle-class due mainly in part to the commercialization of agriculture. Simultaneously, women were allowed to join certain sectors of the public, family laws were modified, and unveiling was enforced in 1936. Persian scholars have theorized that around this time there was a move from private patriarchy to public patriarchy. Meaning, there existed a state sponsored oppression which served to reinforce trauma to women through the appropriation of feminism, the act of unveiling. For instance, under Reza Shah all independent women’s organizations were banned and replaced with a state-sponsored Ladies Center which was primarily for privileged women, effectively stifling any radical voices. The female body became a symbol of the nation-state, with Reza Shah using women to legitimize his goals of modernization against the clergy’s authority. Our bodies represented religious morality or modernity to enforce the state’s symbolic or systemic powers depending on which state you were dealing with. A lot of traditional language was re-written at this time and that is also a longer conversation that I will not be exploring here.

Enacted in 1967 and later abolished in 1979, The Family Protection Law established rules and restrictions on marriage, divorce, child-custody, and polygamy. The laws were a policy of a nation-state that attempted to use the body of women as the consolidation of state power. Reforms in the judicial system only slightly modified existing religious laws in marriage and divorce.

Reza Shah’s autocracy came to an end following World War I, when the Allies invaded Iran and removed him from power. The public did not resist the coup and Reza Shah’s son, Mohammad Reza Shah, was given control of the crown. During this period, there was a re-emergence and flourishing of political organizations and activities, but the clergy continued to fight against the women’s suffrage movement, blocking a bill for women’s rights to vote submitted by the Democratic Union of Women in 1944. I’m going to skip going into details on period of Mohammad Reza’s Shah’s power suffice to say it is a very conflicted period for a lot of Iranians and a hot topic, even today. His son, Reza Pahlavi, has taken a very active and, in my opinion, a very democratic position as one of the leaders outside of Iran during the current protests.

The Islamic Revolution of 1979 was a revolution of morals and ethics. The re-establishment of gender roles was a primary concern for the newly elected Islamic regime and it was the growing public dissent of Mohammad Reza Shah’s regime that ultimately turned Iran into a theocratic state. Though land reforms by the Pahlavi’s had played a major role in the growing intolerance, it was mainly women’s emancipation that spurred Ayatollah Khomeni, who would become Iran’s first Supreme Leader, decision to launch a campaign against the Pahlavi dynasty. Thus, the Islamic Revolution was predominantly a sexual-counter revolution with postrevolutionary Iran’s imposition of restrictions on women, nullified and re-establishment of traditional legislation, and the resurgence of traditional Islamic values to uphold virtue and piety. During this period a clear division between veiled and unveiled women began to take form. The Islamic state thrived on binaries (veiled/unveiled, pious/impious, east/west). Whereas the Pahlavi dynasty privileged the bourgeois, the Islamic Revolution capitalized on lower income and uneducated religious women, using them as guerilla fighters, in street patrols and as agents of the military. These women were guardians of chastity and sanctity, purification served as pretense to patriarchy.

The ideal image of the Islamic woman permeated within the capital of Iran, Tehran. Mehrangiz Kar, human rights lawyer and essayist, recounts the attacks on female mannequins in shop windows: “the mannequins were turned into role models for Iranian women.” Shop owners “detach[ed] the heads of mannequins from their bodies” in order to remove lips and eyes that were deemed to be too “stimulating” and breasts were replaced with “coils [that] displayed the mutilated gender of the mannequins.” These mannequins were the ideal feminine woman for the revolutionary fundamentalists – without “eyes to see, a tongue to speak, and legs to run away.” They symbolically managed to represent the lifeless objects that the mullahs considered women, without identity or agency unless they were bonded with the state, promoting the state’s power. In place of the Family Protection Law came the Islamic Punishment Law. I’ll spare you the details, but it’s pretty awful. During and after the Islamic Revolution, the mullahs heavily restricted poetry, lyrical music, cinema, writing and art – essentially anything that might  promote a critical dialogue. Universities were closed for three years while the mullahs essentially re-wrote history. The aftermath of the Islamic Revolution split modern Iran into one of public adherence and private subversion. Of course this line is not exact, as one can spill into the other. The private is always under threat by the police forces, while the youth push traditional boundaries with their style and clothes.

After Khomeini’s death in 1989 until 1997, a regime of intolerance reigned. It was only in 1997, after the election of Khatami was able to secure his position – over 80% of the population voted him into office and while he managed to loosen some restrictions many were still disappointed. This was further fueled by a series of gruesome murders of political activities (including a prominent veteran politician and his wife) in 1998 alongside a burgeoning students movement, left many outraged and disillusioned. It was during this period, that I returned to Iran for highschool and attended the International School. I was lucky to be in Iran during this time, as I placed myself in a lot of very risky and precarious because having lived in the United States since I was five years old – I did not truly understand the consequences of my actions as a teenager in Iran. What we describe as normal here, is met with punishment in Iran. No dancing, no holding your boyfriends hand, no going to the mall as a woman without supervision. I will leave these stories for the q&a. It was around, I believe 2005, the Reformist party fell apart (due to complicated and violent state tactics) and led to the rise of the neo-conservatives. This was when Ahmadinejad, who utilized a neo-Khomeini populism to win over the common man, won over Rafsanjani. In short, it was giving Trump before Trump.

In 2009, a wave of protests over the recently held elections in Iran came as a response to Ahmadinejad’s re-election over popular opposition candidates Mir-Hossein Mousavi and Mehdi Karroubi. Popularly referred to as the “Green Revolution,” or the “Twitter Revolution” based on protestor communications via the social-networking site, protestors clashed with both police and civilian neo-conservative forces. Student dorms were raided and protestors were violently beaten resulting in 36-72 deaths (the final number remains contested) with one – the murder of Neda Agha-Soltan caught on video. Neda was unarmed, accompanied by her father, and shot at from. The shocking footage of her death has been viewed millions of times on Youtube and aired on international news channels and resulted in calls for human rights watches in Iran. However, instances of abuse and rape continued to proliferate stories of protestors who were jailed or detained during the marches. As history often repeats itself, we see the same story playing out now across Instagram with the death of Mahsa Amini. Current uprisings have shown a resistance to the current theocratic regime of neo-conservative authoritarianism but because of the immense power structure of the government, it will not relinquish power. Therefore, the biggest thing asked by protestors inside Iran is to ensure that they are not silenced. That their stories continue to be told. That we hold our own politicians accountable and ask them not to recognize the Islamic Republic as a legitimate regime. To not make deals with them.

In Iran, religion is the leading force that binds gender politics, sexuality, and identity. Religion becomes violent because it is interwoven with patriarchy and allows for the exoneration of individuals of moral wrongdoing – it often excuses evil and overlooks justice. With this sort of clemency, it is hard to imagine the neo-conservatives changing in any meaningful way which is why reform is not an option. Now is the time for Revolution.