Boise area real estate and rental management blog
On January 1, 2024 the Fed requires LLC’s and corporations to file with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) identifying individuals who have “substantial control” over the entity, or individuals who own or control at least 25% of the entity’s ownership interest. This would require every existing LLC that holds rental property to file this form by 1/1/2025.
I am told that this law was enacted to identify illicit financial activities, such as money laundering. Is it an essential step towards accountability and transparency or an additional burden for business owners?
I found this process to be challenging, when I attempted to file one of my simplest of LLCs, where Stacy McBain and I are 50/50 members. The website https://www.fincen.gov/boi offered 2 ways to submit our information. Unfortunately, I received page load errors on the first option and proceeded to the 2nd option, which was a web interface that does not save your work, so once you start, you either complete, or you back out and have to start over again.
I either missed something or the website failed to ask for multiple owners. Therefore I will have to return and correct my filing. The requirement to upload personal information, including driver's licenses, via an online raises concerns about data security and privacy. It did not ask for my SSN and if it did, I was prepared to abandon my reporting.
CPAs are prohibited from assisting with filings, which I believe adds another layer of complexity. While legal firms are exploring avenues to provide this service, the intricacies of LLC structures, especially those with tiered memberships, amplify the challenges. The penalty for not filing is $500 per day up to $10,000.
In essence, I believe that the Feds see this as a way to fortify financial oversight and integrity, but its implementation seems lacking to me. Is this a necessary step towards transparency, or does it represent an overreach by the feds?
Tony A Drost
Swope Investment Properties
Your Boise Investment Properties Team
