The numbers for the FinCen BOI requirement starting 2024 are staggering. FinCen is going to allow access to the data collected from business owners to different financial institutions and State and Local authorities.

From different articles, “...FinCEN also estimated that 15,934 entities will seek access to BOI, and that the vast majority of them—15,716—will be financial institutions. It estimates that the rest will consist of 215 state, local, and tribal agencies and three self-regulatory organizations.”

“… FinCEN estimates that during year 1 the annual hourly burden will be 8,743,781 hours. In year 2 and onward, FinCEN estimates that the annual hourly burden will be 3,616,964 hours. The annual estimated burden hours for State local, and Tribal entities and [self-regulatory organizations} is 2,268,789 hours in the first year, and 1,699,612 hours in year 2 and onward.”

If we break it down based on the information, then, we can see how much time each access requested is expected to spend:

  • Financial institutions – 8,743,781 hours divided by 15,934 entities equals 548,75 hours (or around 14 weeks of work per institution)
  • State and Local – 2,268,789 hours divided by 215 entities equals 10,552.50 hours (or around 264 weeks of work per institution)

After looking at this information, you need to wonder how is the paperwork so overwhelming to get access, especially for State and Local entities requiring almost 20 times more expected time. Also, you could wonder what it could happen with the hundreds of millions of dollars spent on this compliance effort (including cost opportunity) when there are several legal cases still outstanding on the potential unconstitutionality of this reporting measure.

Also, FinCen is expecting around 33 million BOI filings in 2024 so it could be millions of hours of business owners time to comply with this new requirement (probably 30 minutes to an hour to get a general understanding and around 5 to 10 minutes to fill out the initial BOI report).

We have spent numerous hours reading and attending seminars and workshops to get a better understanding, and we have given several seminars related to this relevant topic (many of them available in our blog or in Youtube). We highly recommend to reach out to a professional to get guidance with this topic, like a lawyer or a CPA / EA based on the NJ Supreme Court opinion.

 

NY Society of CPAs – FinCEN Estimates Entities Will Spend Millions of Hours Seeking Access to Beneficial Ownership Information

The Tax Adviser – FinCEN estimates millions of hours will be spent seeking BOI access

Federal Register (full document) –  Notice by the Treasury Department on 07/23/2024