The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) is urging businesses to be aware of potential scams relating to the Corporate Transparency Act and beneficial ownership information reporting.
The Corporate Transparency Act, or CTA, went into effect on January 1, 2024, requiring millions of businesses to submit entity and beneficial owner information to the federal government. This new reporting requirement applies to any domestic or foreign entity that was formed or registered through a state filing — including LLCs, corporations, LLPs, and LPs — and that does not qualify for an exemption.
Many business owners are still unaware of or uncertain about their compliance obligations under the CTA. Fraudsters are seeking to take advantage of this confusion in order to obtain money or gain access to sensitive information.
Examples of Corporate Transparency Act scams
Fraudsters posing as government agencies are unfortunately not a new phenomenon. Many have become quite skilled at crafting communications and documents that appear authentic. Scammers will often use official language and include details about the business and owners. Provided forms may also seem official, looking similar to government forms.
Based on calls and reports received by FinCEN, here are some red flags indicating that an unsolicited email, text message, or physical document received through the mail is part of a scam.
- Request for payment. FinCEN advises not to send money in response to correspondence that claims to be from FinCEN or another government agency. There is no fee to file a beneficial ownership information (BOI) report directly with FinCEN, and FinCEN does not send correspondence requesting payment to file a BOI report.
- Request to click a URL or scan a QR code. Scammers will often use harmful links or QR codes to steal sensitive information or gain access to your devices. FinCEN advises the public to not click on any suspicious links, download attachments, or scan QR codes in unsolicited mailings, emails, and websites.
- References to “Form 4022” or “Important Compliance Notice”. FinCEN explicitly states on its website that it does not have a “Form 4022”, and that correspondence referencing a “Form 4022” or “Important Compliance Notice" is fraudulent. FinCEN advises the public to not send beneficial ownership information to anyone by completing these forms.
- References to a “US Business Regulations Dept”. FinCEN states that there is no government entity called “US Business Regulations Dept”, and to treat correspondences referencing this as fraudulent.
With business identity theft on the rise, businesses must be cautious in dealing with anyone claiming or implying that they are from a government agency and demanding payment or information.
What can businesses do?
It’s important for companies to understand and comply with any necessary reporting requirements under the CTA. Non-compliance carries hefty fines and penalties, including civil fines of up to $591 per day.
So what can businesses do to protect themselves from fraud while staying on top of their compliance obligations?
Businesses should be aware of the common tactics used by bad actors and make sure that employees are also trained to identify them. Don’t click on or scan suspicious links and QR codes. You may report a suspected scam utilizing Treasury Bureaus, seals and/or employees to the Treasury’s Office of Inspector General.
If you believe the correspondence may be legitimate, contact the organization using the information provided on its official website, not the information provided in the correspondence. FinCEN allows the public to make inquiries about BOI/CTA and other topics through an online form or by phone.
When it comes to educating yourself on the CTA and BOI reporting, there are a number of resources available. FinCEN has an FAQ page with useful information related to BOI reporting. CT Corporation also has a knowledge center devoted to the CTA and BOI reporting, including updates from FinCEN.
Lastly, you may want to contact a professional if you need assistance in understanding your BOI reporting requirements or who can submit BOI reports with FinCEN on your behalf. In addition to filing initial and updated reports, an established and trusted provider can provide you with a centralized view of your BOI data and provide tools to help safeguard the personal information of beneficial owners and company applicants.
Fast, accurate, and secure: BOI filings with CT Corporation
CT Corporation is an approved API provider, working directly with FinCEN. Our streamlined and automated workflow will reduce BOI filing times and errors, helping to ensure you don’t face the threat of harsh civil and criminal penalties for non-compliance. Explore the benefits of our purpose-built Beneficial Ownership Platform, including:
- Ease of use: Reduce BOI filing confusion and ensure compliance with our five-step filing process.
- Efficient: Our fast and automated filing process can save hours on each filing.
- Secure: Safeguard your sensitive PII using our robust security protocols.
Learn how CT Corporation’s Beneficial Ownership platform will help you confidently file your beneficial ownership reports.
