FinCEN Finalizes Rule on Use of FinCEN Identifiers in Beneficial Ownership Information Reporting
Under the Corporate Transparency Act (CTA), reporting companies are required to report to the Financial Crimes Enforcement Network (FinCEN) certain identifying information about themselves, as well their beneficial owners and company applicants. FinCEN’s Beneficial Ownership Information Reporting Requirements Rule (BOI Reporting Rule), published on September 30, 2022, establishes the rules for individuals and entities to obtain and update FinCEN Identifiers, as well as the rules for use of an individual’s FinCEN Identifier.
On November 8, FinCEN issued a Final Rule that specifies the circumstances in which a reporting company may use an entity’s FinCEN Identifier in lieu of information about an individual beneficial owner.
A FinCEN Identifier is a unique number that FinCEN will issue upon request after receiving required information. Although there is no requirement to obtain a FinCEN Identifier, doing so can simplify the reporting process and allows entities or individuals to quickly reference identifying information previously provided to FinCEN.
Why is the FinCEN Identifier important?
A FinCEN Identifier will benefit entities that complete multiple filings. A FinCEN Identifier can ease the administrative burden of reporting the same identifying information for numerous reporting companies within a corporate family. In addition, using a FinCEN Identifier can be an effective data security tool where there is less risk in using a FinCEN Identifier than submitting personal identifiable information multiple times through numerous reporting entities.
The Final Rule sets out certain amendments to the BOI Reporting Rule which implements Section 6403 of the CTA, to specify when and how entities required to report beneficial ownership information (BOI) to FinCEN may use a FinCEN Identifier to report the BOI of certain related entities. The amendments specify how such entities may use an entity’s FinCEN Identifier to fulfill their BOI reporting obligations under.
How Do You Obtain a FinCEN Identifier?
Reporting Companies
Reporting companies may request a FinCEN Identifier by checking a box on the beneficial ownership information report when they submit the report. After the reporting company submits the report, the reporting company will immediately receive a FinCEN identifier unique to that company.
FinCEN Identifiers are not available before the BOI reporting system goes live or before the reporting company files reports using that system.
Individuals
Obtaining a FinCEN Identifier is voluntary. To obtain a FinCEN Identifier, individuals must file applications electronically with FinCEN that contain certain information about themselves. FinCEN will store such information in its BOI database for access by authorized users.
As with other BOI data submitted to FinCEN, filers must update information submitted to apply for a FinCEN Identifier, such as changes to addresses or document ID numbers within 30 days of that change.
Applications for individual FinCEN identifiers have not yet been made available on the FinCEN website.
As always, please feel free to contact us if you have any questions at info@krscpas.com.
