Nonprofits and the Corporate Transparency Act - Who Needs to File?

Nonprofits and the New Corporate Transparency Act - Who Needs to File?

Congress enacted the Corporate Transparency Act in 2021. Starting in 2024, this law requires most businesses in the United States to report information about who owns or controls them.

Do nonprofit organizations need to file? The answer is: it depends. Nonprofits that already have a letter from the IRS telling them that they are tax-exempt have an exemption from filing. But nonprofits that do not have tax-exemption, even if their application for tax-exemption is pending, will have to follow the same rules as other types of business.

Starting in 2024, every newly formed business must file a report with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The report will contain information such as legal name, birth date and other personal information for each ‘beneficial owner’.

Reports are filed online at Beneficial Ownership Information Reporting | FinCEN.gov.

Here are the reporting timelines:

  • If your organization was created or registered prior to January 1, 2024, you will have until January 1, 2025 to report BOI.
  • If your organization is created or registered in 2024, you must report BOI within 90 calendar days after receiving actual or public notice that your organization’s creation or registration is effective, whichever is earlier.
  • If your organization is created or registered on or after January 1, 2025, you must file BOI within 30 calendar days after receiving actual or public notice that its creation or registration is effective.
  • Any updates or corrections to beneficial ownership information that you previously filed with FinCEN must be submitted within 30 days.
  • If your organization was tax-exempt, but lost its tax-exempt status (for example, an organization that automatically lost its tax exemption for failure to file an annual 990,990-EZ or 990-N), then it will have 180 days to file from the date it lost its exemption.

For more information see: BOI_Small_Compliance_Guide.v1.1-FINAL.pdf (fincen.gov), or contact us at info@magillrumsey.com