Corporate Transparency Act for Foreign Reporting Companies: Filing Requirements, Utilizing FinCEN Identifiers

Beginning Jan. 1, 2024, small businesses, including certain "foreign reporting companies," are required to report beneficial ownership information (BOI) to the U.S. Department of Treasury's Financial Crimes Enforcement Network, better known as FinCEN. Foreign entities, already familiar with FinCEN via the FBAR, must now brace themselves for more U.S. reporting requirements. Like the FBAR, not complying with the CTA carries stiff penalties. These range from $500 to $10,000 per violation and can include imprisonment.

Foreign reporting companies can be corporations, LLCs, or other entities formed under the law of a foreign country registered to do business in any U.S. state or tribal jurisdiction. Foreign entities registered as doing business in or paying sales tax to a U.S. state could be readily identified by FinCEN as subject to this new reporting requirement. As with domestic reporting entities, there are exceptions; however, a foreign entity could fail to meet the large operating company exception by not having a physical presence in the U.S.

In November 2023, FinCEN agreed to allow reporting companies to use a FinCEN identifier instead of information about a specific beneficial owner in specific circumstances. This could benefit individuals with ownership in multiple reportable entities. Tax practitioners working with multinational entities need to grasp the nuances of the CTA as it applies to foreign entities.

Listen as our panel of international tax reporting experts explains how the BOI reporting requirements impact foreign entities.

1. Corporate Transparency Act for foreign reporting companies: introduction
2. Due dates
3. Foreign reporting companies
4. Penalties
5. Exceptions
6. Privacy Issues
7. Reporting requirements
8. Utilizing FinCEN identifiers
9. Best practices

The panel will cover these and other key issues:

• What foreign entities must report BOI?
• What penalties could be assessed if an entity does not report BOI?
• When should an owner consider obtaining a FinCEN identifying number?
• What exceptions to the CTA reporting requirements are there for foreign companies?

Learning Objectives

After completing this course, you will be able to:

• Identify "foreign reporting entities" under the CTA
• Determine if an exception applies to the reporting requirement for a foreign company
• Decide what penalties could be assessed for noncompliance with the CTA
• Ascertain when a beneficial owner should apply for a FinCEN identifier

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).