Are nonprofits required to file a Beneficial Ownership Information (BOI) report with FinCEN under the Corporate Transparency Act (CTA)? This is a question many nonprofit organizations are asking as they navigate the new reporting requirements. Enacted in 2021, the CTA requires certain entities to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) to help prevent and combat money laundering, terrorist financing, corruption, and tax fraud. Let’s break down what nonprofits need to know about this requirement.
Who must file
The CTA applies to corporations, limited liability companies (LLCs), and other similar entities formed or registered to do business in the United States. These entities are classified as “reporting companies.”
What to file
Reporting companies must submit information about individuals who own or control them. This includes:
- Full name
- Date of birth
- Address
- An image of a government-issued ID (e.g., U.S. driver’s license, passport, or identification card)
Filing Deadlines
Deadlines for submitting a BOI report depends on when the company was formed:
- Before January 1, 2024: File by January 1, 2025.
- Between January 1, 2024 and January 1, 2025: File within 90 days of receiving notice of effective formation or registration (typically received from a secretary of state or similar office).
- After January 1, 2025: File within 30 days of receiving notice of effective formation or registration.
Filing Fees
Good news—There is no filing fee to submit a BOI report.
Where to File
BOI reports can be filed electronically on FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov).
Filing Frequency
BOI reporting is a one-time requirement. Updates are only needed if the submitted information changes.
Are Nonprofits Required to File a BOI Report?
The short answer: It depends.
Nonprofits tax-exempt under Section 501(c) of the Internal Revenue Code are exempt from BOI reporting. This exemption applies to organizations with an IRS determination letter recognizing their tax-exempt status (see exemption #19 in FinCEN’s Small Entity Compliance Guide).
However, nonprofits without IRS recognition—such as those waiting for approval of their Form 1023 or those that have not yet applied—must file a BOI report.
What if a Nonprofit Loses its Tax-Exempt Status?
- Within 180 days of losing the status: The nonprofit remains exempt from BOI filing.
- After 180 days: The nonprofit must file a BOI report.
Staying Compliant
Understanding whether your nonprofit is required to file a BOI report is critical for maintaining compliance with federal regulations. While tax-exempt nonprofits are generally exempt, organizations without IRS recognition or those that have lost tax-exempt status for more than 180 days must file.
To avoid penalties and maintain transparency, stay informed about these requirements. If you’re unsure about your filing obligations, consult a trusted nonprofit accounting professional to ensure compliance.
Need help ensuring that your nonprofit remains compliant? Contact us today to learn how we can support your nonprofit’s accounting and compliance needs.
