337 - The BOI (Beneficial Ownership Information) Report and Why You Need to File It ASAP Unf*ck Your Biz With Braden

On today's episode of the podcast we're taking about the Corporate Transparency Act and why it comes with a Beneficial Ownership Information report. Spoiler alert: you'll need to fill out the BOI form this year if you haven't already.

When Congress makes new laws, they set a day when the law becomes effective. It’s a heads up that they’re changing the rules and that starting on that day-you’ll be expected to obey. 

That delay gives everyone time to

• read the new law, • ask questions about what the new law means, and • organize resources in preparation for the new law. 

In 2021 Congress passed a bundle of laws as part of the annual defense budget which came into effect on January 1st of this year called the Corporate Transparency Act.

The Corporate Transparency Act requires most businesses to disclose certain information to the federal government.

We’ll cover: 

• whether or not your business is exempt from reporting,• whose information gets reported, and • how to report that information if you’re required to do so. 

The Corporate Transparency Act is for helping law enforcement agencies find, prevent, and prosecute financial crimes. Financial crimes can look like a lot of different things. A popular example you see in movies is money laundering, when people get money from illegitimate sources but can't just go deposit it in a bank or use it to buy a car or a new house with it so they disguise it as other assets and run it through their business. People have been doing this for a very long time and proving it can be difficult.

Back in 1970 Congress gave us the Bank Secrecy Act, which said banks have to actually help law enforcement identify and prosecute financial crimes. The reason was because banks didn’t care where the money was coming from, they were getting paid and it wasn’t their job to ask whether money was coming from a legitimate or criminal enterprise. Congress said banks don’t get to turn a blind eye and have to report suspicious activity or really huge transfers. While this helped a lot, there was still plenty they couldn't catch.

In 1990, Congress gave us a sub-department of the United States Treasury called the Financial Crimes Enforcement Network, or FinCEN. FinCEN lets law enforcement agencies talk to each other about that information that banks have to report, like suspicious activity or huge transactions.

They compare notes, so even if a single blip on the radar didn’t raise any alarms at the FBI, they might talk to state law enforcement and compare notes and find out about criminal activity they couldn’t see before. FinCEN even gives awards every year to different agencies that successfully use FinCEN’s data to prevent or prosecute crimes. 

For example, in 2023-

• The Drug Enforcement Administration used FinCEN data to find and seize 4.5 metric tons of cocaine• The Secret Service and U.S. Postal Inspections Service used FinCEN data to shut down a scheme to compromise emails• And the Department of Justice’s Civil Rights Division used FinCEN data to protect hundreds of victims of a human trafficking ring. 

But there was a huge absence of information for FinCEN that still made it really hard to crack down on financial crimes. 

FinCEN knew what the banks were telling them about suspicious activity and big transactions and what other agencies noticed about that information but they didn’t know who was behind these semi-legitimate businesses. 

That’s what this new law, the Corporate Transparency Act is for. Businesses affected by the law will have to complete a Beneficial Ownership Information report to FinCEN.

While it's not a ton of information they require from you, it's information from a ton of people, and that tells them more than you might think and helps them discover a lot more criminal activity that they couldn’t know about just from the banks or by talking to each other. 

By collecting a small amount of information ab