FinCEN Filing in Connecticut: The Risks of Late Filing

FinCEN Filing in Connecticut The Risks of Late Filing

Ever since the Corporate Transparency Act (CTA) was officially enacted, most businesses across the U.S., including those in Connecticut, have become obliged to complete Beneficial Owners Information Reports, or BOIRs. Filed with the Financial Crimes Enforcement Network (FinCEN), BOIRs make business ownership structures more transparent, so illicit activities are easier to identify and hold to account.

As stated, the majority of businesses in Connecticut will need to file BOI reports, but many business owners are unsure of the ins and outs of the process. Many also aren’t aware that there are serious risks and penalties for failing to file your report or filing past the deadline. This guide explains how FinCEN filing in Connecticut works, while also looking at the risks of late filing.

Step-by-Step Instructions for FinCEN Filing in Connecticut

All FinCEN BOIR filing is done online, using FinCEN’s own official E-Filing System. You can just log onto that system, enter all the info that’s needed for your report, and submit it digitally the very same day. The process, therefore, is quite convenient and easy to work with, but it’s important you have all the necessary details to hand before you start and double-check your report prior to submission.

  1. The first step is to identify all beneficial owners – those who have a significant level of influence over the business or benefit from it, either directly or indirectly. You can consult the CTA itself for more details on what, exactly, qualifies someone as a beneficial owner.
  2. Gather key bits of information from the full list of beneficial owners. To complete your BOI report, you’ll need not just the owners’ names and addresses, but also copies of some form of photographic ID for each one.
  3. Once you’ve collected all the data you need, head to the e-filing system and enter it to complete your report. You can choose to either do this immediately via the online system or download a PDF to complete the process at your own pace and upload it later. Either way, it’s best to verify all the info before you finalize and send your report away for review.

Who Needs to File a BOIR in Connecticut?

If you own any of the following business types, you’ll almost certainly have to complete a BOIR in Connecticut:

  • Corporations
  • LLCs
  • All other business entities that were created by filing a document (like a Certificate of Organization) with the Connecticut Secretary of State

Note that there are exceptions. Specifically, the CTA outlines 23 business entity varieties that don’t have to submit BOI reports, like publicly traded companies and governmental agencies.

When You Need to File Your BOI Report in Connecticut

There are strict deadlines associated with BOI FinCEN filing in Connecticut (and the rest of the U.S.). However, the exact deadline for each business will vary, depending on when that business was formed. Older businesses have more generous deadlines. Here’s how it works:

  • For businesses formed before 2024, the deadline is January 1, 2025.
  • For businesses formed during 2024, the deadline is 90 days after the business was officially created (from the date when you received notice).
  • For businesses formed in 2025 and after, the deadline is 30 days after the business was created.

What Are the Penalties for Late Filing?

Accountants may find themselves facing questions from clients about BOI reports. One of the most common questions that may arise is: “What happens if I don’t file in time?” Well, there are penalties associated with late filing, and those penalties can be quite severe, especially if you still haven’t filed long after the deadline has passed.

The penalties for late filing for BOI reports include:

Fines

Connecticut follows federal guidelines regarding BOIR missed deadline penalties. So, if you miss the deadline, you may be subject to fines. Those fines can total $500 for each day the BOIR has not been filed after the deadline has passed. So, even missing the deadline by a few days can be enough to generate a very hefty four-figure fine, and it’ll keep getting bigger with every additional passing day.

Criminal Penalties

In some cases, businesses that fail to comply with BOI report obligations can face much more than just the aforementioned fines. Owners may even be subject to criminal charges, especially if they continually fail to submit the report when it is requested. Those charges could lead to jail sentences of up to two years and fines of up to $10,000.

Additional Problems With Late Filing

What Are the Penalties for Late Filing

As well as the penalties above, filing late can also cause:

  • Confusion for Your Business: Having outstanding reports and failing to comply with your business’ obligations can cause a lot of confusion. Co-owners, partners, investors, stakeholders, and so on may feel frustrated or unsure about businesses that don’t submit their BOI reports.
  • Inaccuracies if You Rush the Filing Process: If you leave the filing of your BOI report to the last minute or after the deadline, you might end up rushing through it to avoid any further fines. Rushing often leads to mistakes, and an incorrectly filled-out report could cause even more problems for you.
  • A Backlog of Paperwork to Get Through: The more you put off paperwork, the more it adds up. BOI reports are just one of the many documents that business owners in Connecticut need to handle. It’s better to submit them early and avoid having to deal with a hefty backlog later on.

Best Practices for Accountants in Connecticut

Best Practices for Accountants in Connecticut

Accountants are among the Connecticut professionals the most affected by BOI reports and the CTA on the whole. Not only do accounting firms need to file their own BOI reports on time and in full, but they may also have a lot of clients who want assistance with their own reports. Some clients may even ask their accountants to fill out their BOI reports for them.

With that in mind, here are some crucial practices and tips for accountants to keep in mind, though many of these are also applicable to business owners in general.

Read and Understand the CTA in Detail

The CTA is, effectively, the overriding document that sets out what BOI reporting is, how it works, who has to file, who is exempt, and so on. It’s an important source of information about these reports, and so, by reading through it and thoroughly understanding it, you’ll put yourself in the best possible position to advise clients about it and fulfill your own BOIR obligations, too.

The CTA is available to read in full. So, when you have the time to do so, give it a look, take notes, highlight key sections, and so on, depending on what works best for you. Keep it bookmarked, too, so you can refer to it again in the future.

Be Proactive and Encourage Clients to Do the Same

As this guide has shown, it’s simply not worth running the risk of filing your BOI report late. You (or your clients) might think it’s fine to put off your BOIR until the last week or even the final few days before the deadline. But, if you wait too late, there’s a risk you won’t have enough time to gather all the info you need, and you could make an error when filling out your form.

Don’t make that mistake. Be proactive in filing your own BOI report. Get it done as early as you can, and, if you’re an accountant, encourage your clients to do the same. The sooner the report gets filed, the better, as it means you’ve got far less risk of any deadline-related issues. Plus, even if you make a mistake in filing, you’ll have time left over to contact FinCEN and make amendments.

Use BOIR Software for Accurate, Compliant Reports

There are apps and software solutions for everything in today’s technological world, including BOIR apps that are designed to help with BOI reporting. The best BOIR software takes a lot of the hassle and hard work out of completing BOI reports, filling in sections automatically, storing key beneficial owner info for you to copy or refer to, and even cloning reports if you need to file versions for multiple businesses.

It’s strongly recommended to find a good BOIR program and use it for all your BOI reporting needs. It’ll make filling out reports far faster and easier, which can be especially relevant for professionals – such as accountants – who may spend a lot of time completing BOI reports, both now and in the future. If you can find a good app to help you, you could save yourself hours of time and effort.

File Your BOI Report Today

Whether you’re an accountant seeking to learn more about FinCEN filing in Connecticut to help your clients or a business owner who needs to file their report, the takeaway is this: BOI reports should be taken seriously, and all deadlines must be adhered to. If you file late or leave completing the form until the last minute, you could face serious consequences. Invest in helpful BOIR software, gather the info you need, and file as soon as possible for peace of mind.

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Is your Company Exempt from Filing BOI Report?

There are certain conditions under which companies are allowed exemption from filing BOI reports. Our exemption checking tool will help you find whether or not your company qualifies for it.