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BOI Filing, Made Easy

Stuart Serota is a seasoned legal professional and named partner at New York Law Firm, where he has helped clients for 30+ years in corporate and real estate law. Throughout his career, Stuart demonstrated a deep understanding of the intricacies of corporate structures, ensuring that his clients’ businesses are set up for success while remaining compliant with regulatory requirements. Motivated by a commitment to providing accessible, effective, and efficient support, Stuart embarked on a mission to use technology to develop a secure and user-friendly platform for filing with FinCEN, resulting in BOI Filing Experts.


In this episode of TechTalk Podcast, Brad Cost, Dr. Jay Greenstein, and Stuart Serota sit down to discuss:

 

  • The purpose and implications of the Corporate Transparency Act.

  • Filing LLCs and staying compliant with BOI requirements.

  • BOI Filing Experts' simplicity.


SHOW NOTES:


5:49 - The Corporate Transparency Act and its implications.

  • [Stuart] "In 2021, the Senate passed the Corporate Transparency Act, which was created to combat illicit activity that was going on in corporations and LLCs that were being formed. There was tax fraud, money laundering, and financing for terrorism. Unbelievably, the United States was behind with this requirement to disclose who the beneficial owners of entities were. As an attorney, we've set up lots of LLCs, so people were hidden - not necessarily for nefarious reasons, but they wanted privacy. Finally, our foreign counterparts stated they weren’t going to do business with us anymore because they couldn’t tell who owns these corporations and LLCs, so we came up with the Corporate Transparency Act. The CTA requires reporting companies to file, like LLCs, corporations, or anyone that files with the Secretary of State to do business in the United States. There are 23 exceptions out there, but predominantly most chiropractors are required to file. There are a lot of requirements that have to be followed, depending on when the entity was formed, and those requirements change. It's complicated, like any good government program. I was getting calls from people that were receiving letters from their attorneys asking for an exorbitant amount of money to do their BOI reporting requirements. I thought it was crazy, and suggested they just take a moment to sit down with their papers and do it themself. However, if they needed help, then to ask for help. A lot of accountants, through their associations, have decided this is not something they're going to do and, unfortunately, the accountants are the people with most of the information that needs to be filed. The accountants don't want to touch this. They want hands off and no responsibility because there’s a lot of liability here. Even though this is a simple form, the very bottom line is if you don't do it, the penalties are outrageous."


  • [Dr. Jay] "Like what?"


  • [Stuart] "Well, $500 a day until it's cured. Up to $10,000 and potentially some criminal repercussions could happen if this was a criminal activity. If you don’t file, they could throw the $500 per day infraction at you. Again, we don't know how they're going to enforce this. This is brand new, and it's filled with pitfalls. Not only do you have to do it in a certain amount of time, but if there are minor changes with your beneficial ownership structure, you have 30 days to make a change."


10:22 - The United States Department of Treasury's FinCEN. "It is. It's the same reasons the banks are going through. People got all bent out of shape that they were asking for this information, but this is information the government already has about us. It's just not in the right place and that's what the government's looking for. They want to know if ABC Corporation is out there. They want to know who's attached to it. Now, not only do they want to know who owns 25% or more ownership in that entity, but they also want to know who has substantial control and management of that entity.


11:00 - The Patriot Act. "It's not under the Patriot Act, but it's in line with the same protections that the government's been putting in place for some of the same reasons."


11:13 - Why people form LLCs. "There are lots of reasons people form LLCs. There are tax benefits to forming an LLC instead of being the sole proprietor running the business. I tell clients that one of the main protections is liability issues. You now have taken an asset or business and you've put it under an LLC, and it stands alone. You don't want one of your businesses to bring down your whole empire."


12:46 - Notifying existing vs new LLCS. "I can't speak for attorneys and accountants. Accountants just finished a pretty busy season, so I'm not going to throw them under the bus, but this is brand new. This is January 1st, 2024, the first obligation. If your company, which we'll call a reporting company, had an existence before January 1st, 2024, you actually have leeway to file until the end of this year, December 31st, 2024. If you formed on or after January 1st of this year, you had 90 days from the date you formed your entity to file. Now, as of January 1st, 2025, the government said 90 days is too much and they need you to file within 30 days. The 30 days is going to be the requirement moving forward."


17:17 - Stay up-to-date with BOI requirements. "Now, after you file this, let's say you move. You just triggered a requirement to file a new BOI report. Now, that's not a big deal, but it has to be complied with because the penalties are just too great. Again, we don't know how they're going to enforce them, but we do know they have the right to charge up to $500 per day until you correct your filing. This is important to the government and they're not going to drop it. There are 23 exemptions, but I think one of two that really apply to your listeners is if they have a tax -exempt entity. A lot of chiropractors I know run tax exempt entities on the side and those will not have to file. They will have to look at it very carefully to make sure it complies with the law, but those are exempt under the law. The other exemption that may apply to your listeners is if they have a company that's been sitting on the shelf and it's really inactive, those do not have to file. However, if it does become active, you now have 30 days to file."


19:18 - Using BOI Filing Experts for simplicity. "We've been told that this is a confidential database, that it's only used for law enforcement, that the IRS already has this information, and that this is a federal law. I recently received a phone call from someone who only had two days to file their BOI. In February, they set up a new LLC in Florida and were very concerned about filing it. After we got them filed, he mentioned how glad he was he didn’t have to do this for his Maine LLC because Maine wasn’t following it. I quickly responded that they were right that Maine wasn’t following it, but that the feds were going to come after them. People are getting a lot of misinformation. It might sound awful and painful, but I made a proprietary website that has taken the government's website, pruned it down, and made filing easy. If you have a question, there are answers and resources available to you on our website."


20:51 - Doing the hard part so you don't have to. "When I started this, I had the advisory panel go on FinCEN's website and try to replicate yet simplify it. These were educated people and all of them came back saying how long it was going to take, so we had a development team put it together. We made our wish list of ways to make this easy for people that own corporations and have to comply with this new law. That's really what we're doing here today. We're educating. I don't think the government is doing a good enough job to explain it to everybody and the website is complicated. Our development team put together a website that we think is user friendly with a bot to answer your questions. We've created this database for companies to put all of their information into BOI Filing Experts and it's there. If something changes, you have 30 days to change that BOI information. All you would have to do is log into BOI Filing Experts, go into your portal, make the changes, hit submit, and within 2-5 minutes, you'll get a receipt with your transcript, and you're done."


22:56 - Good government policy has confusing directions. "It would be easy if it was just straight up ownership information, wouldn't it? Again, every good government policy has confusing directions. If it was formed before January 1st, 2024, you have to give a certain amount of information. If it was formed after January 1st, 2024, you have to give the same amount of information, but you also have to tell the government who actually formed your entity. As an attorney, a client calls me to form four new entities for them, but now the government is going to want my personal information attached to that entity's BOI filing report. For people that file their own LLCs, that's no problem, but anyone that has their accountant, lawyer, or some ridiculous Zoom loom file their LLCs, they're going to have to find out who filed it for them."


24:23 - Reporting necessary involvement. "It could be the applicant and the government, in their wisdom, has limited it to two people. A lot of people call their attorney to set up their LLC, but the attorney can call his agent up in Albany, New York to file the LLC. When the reporting company, my client, has to go file their BOI, they need information from both me and my agent in Albany. After you've given that information, if you're formed on or after January 2024, the government then asks you for the corporate information: address, taxpayer ID number, and any DBAs or trademarks it operates under. They want to know everyone that's involved with this entity."


32:25 - Let's talk about FinCEN. "FinCEN is the Financial Crimes Network division of the United States Department of Treasury. They're really looking for people that are doing bad things, like money laundering, sending money for terrorism, drug deals. FinCEN is the BOI police of this division of the Treasury. Reporting under the BOI reporting requirements boils down to anyone with a 25% interest in the entity, the reporting company, and anyone with substantial control and management of the company, which is a very vague term. FinCEN has tried to define it, but it's more like one of those “I'll know it when I see it” things. If someone has substantial control over your entity to make decisions, whether it be a board of director, a firing/hiring manager, or a business owner that’s hands off with someone is making all these decisions, they want to know who's got their hands in the cookie jar. This was formed so the government doesn't have to search out who the players are because they should know immediately. It's every reporting company's obligation to do this. How is the government going to educate these people that they need to file? I'm worried about these companies that have been out there for a long time, and they could easily fall into this hole and be hit with substantial penalties. I realized my clients needed help because they can't rely on the complicated government website. They need to go somewhere, and it needs to be smooth. We created BOI Filing Experts - check us out online or give us a call at 888-BOI-TOOL."


38:24 - Is the government invading our privacy as American citizens? "I can't speak for the government. I don't want to speak for the government. I will tell you every international government was frowning upon us. We became Switzerland. We became the last bastion of secrecy. Everyone was setting up these entities and no one knew who they were doing business with at the end of the day. The government already has all this information. The states and drivers licenses have that information. The IRS has the taxpayer ID number and the addresses information. The government's just tired of having to search it out. We want you to be responsible for telling us who is running these entities. If there's a problem, we're going to find every single person that's responsible."


RESOURCES

 

CONTACT STUART

· Call at 888-264-8665 (Ask for Stuart)

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