Dental Practices Have a New Filing Requirement. What Needs to Be Filed?
By David J. Goodman, CPA, MST, Partner
The Corporate Transparency Act (CTA) was enacted in 2021 to help the government identify businesses that are being used for money-laundering, which is a crime punishable by jail and fines. It requires certain businesses to report information about ownership to FinCEN (Financial Crimes Enforcement Unit).
Reporting of Beneficial Ownership Information (BOI) began January 1, 2024.
Practice entities created before January 1, 2024 have until December 31, 2024 to file with FinCEN.
Practice entities created after December 31, 2023 have 90 days from the day of creation to file. Failure to file or the provision of false information can result in penalties of $500 a day until corrected. Criminal penalties can be fines up to $10,000 and/or imprisonment for up to 2 years.
Dental practices are required to file if there are:
- fewer than 20 employees, and/or
- annual gross receipts are less than $5 million.
A beneficial owner:
- controls or owns at least 25% of the practice, or
- exercises substantial control over the business which can include officers and those with significant influence over important decisions.
It is recommended that legal counsel be consulted to determine beneficial owners.
The good news is that as of now this is not an annual reporting requirement unless business information or beneficial ownership information needs to be updated. There is also no fee to file.
BOI Information Necessary
The following information should be available before completing the BOI form:
- legal name and trade name of the practice and the practice address
- the state where the practice was formed and the business tax identification number issued
- the name, date of birth, residential address and an identification number from a driver’s license, passport or state identification of Beneficial Owner(s).
Here is the link to learn more about filing.
Questions about CTA and BOI Filing
Compliance with the CTA and BOI is a legal function. Consider consulting with legal counsel if there are questions regarding the applicability of the CTA’s reporting requirements and issues surrounding the collection of relevant ownership information.
If we can be of assistance to your dental practice with accounting services, our unique data-driven practice management approach and/or tax services, please contact the partner in charge of your account or:
David J. Goodman, CPA
Dental Practice Leader