Which tax exempt entities are exempt from BOI reporting?
There are three types of tax exempt entities that qualify for the “tax exempt entities” exemption from BOI reporting:
(1) Sec. 501(c) organizations - An organization that is described in Sec. 501(c) of the Internal Revenue Code (Code) (determined without regard to whether it has filed an application for recognition for tax-exempt status with the IRS under section 508(a) of the Code) and that is exempt from tax under Sec. 501(a) of the Code.
Sec. 501(c) organizations include most charitable organizations, churches and other religious organizations, and private foundations.
If a Sec. 501(c) organization loses its tax exempt status, it will still be considered to be exempt for 180 days from the date it lost its tax-exempt status. If it fails to have its tax exempt status reinstated within that time period it will have to file a BOI report unless it qualifies for another exemption.
(2) Sec. 527 political organizations - A political organization, as defined in section 527(e)(1) of the Code, that is exempt from tax under section 527(a) of the Code.
This includes a political organization organized and operated primarily for accepting contributions and/or making expenditures for an exempt function, such as the function of influencing the election of an individual to public office; or
(3) Sec. 4947 trusts - A trust described in paragraph (1) or (2) of section 4947(a) of the Code. (Charitable trusts and split interest trusts).
Which tax exempt entities are not exempt from BOI reporting?
Tax exempt corporations, LLCs, or other entities created by the filing of a document with the secretary of state or equivalent office, other than those three listed above, will have to file a BOI report unless they qualify for another exemption.
If my nonprofit is exempt, are its subsidiaries exempt also?
Any entity whose ownership interests are wholly controlled or wholly owned, directly or indirectly, by one or more nonprofit organizations that are exempt from BOI reporting under the “tax exempt entities” exemption are themselves exempt from BOI reporting under what is called the “subsidiary of certain exempt entities” exemption.
What happens if a nonprofit that was exempt from BOI reporting no longer qualifies for an exemption?
A nonprofit that was exempt from BOI reporting, but that is no longer exempt, must file its initial BOI report within 30 days of no longer qualifying for an exemption.
Are entities that assist tax exempt entities exempt from BOI reporting?
There is an exemption from BOI reporting for what is called an “entity assisting a tax-exempt entity”. That is defined as any entity that: (a) operates exclusively to provide financial assistance to, or hold governance rights over, any entity that qualifies for the BOI reporting exemption as a tax exempt entity; (b) is a United States person; (c) is beneficially owned or controlled exclusively by one or more United States citizens or persons lawfully admitted for permanent residence; and (d) derives at least a majority of its funding or revenue from one or more United States citizens or persons lawfully admitted for permanent residence.
Note that while entities that assist tax exempt entities are exempt from BOI reporting, any subsidiaries that they wholly control or own are not entitled to be exempt under the “subsidiaries of certain exempt entities” exemption.
If my nonprofit has to file a BOI report, what information will have to be reported to FinCEN?
The following information has to be reported about the nonprofit organization:
- Its legal name
- Any trade and dba names
- Its principal place of business address
- Its jurisdiction of formation
- The jurisdiction where it first registers to do business in the US if it is a foreign reporting company
- Its IRS taxpayer identification number
Also, the following information has to be reported about each of its beneficial owners:
- Their legal name
- Their date of birth
- Their residential address
- A unique number from an acceptable document such as a passport, driver’s license, or state ID, the jurisdiction issuing the document, and an image of the document.
In addition, nonprofit reporting companies created in the US on or after January 1, 2024, and foreign reporting companies registering to do business in the US for the first time on or after January 1, 2024, will have to provide the same kind of information for their company applicant or applicants that has to be provided for a beneficial owner, except that individuals who are acting as company applicants in the course of their employment provide their business address instead of their residential address.
For more information, read Beneficial Ownership Information reporting – What information is required?
Who are considered the beneficial owners and company applicants of nonprofit reporting companies?
A beneficial owner is an individual who directly or indirectly exercises substantial control over the reporting company or who owns or controls at least 25 percent of its ownership interests. Individuals with substantial control include senior officers, individuals with the authority to appoint or remove senior officers or a majority of the governing body, and important decision makers. (Note that FinCEN has stated that even if a reporting company has no individual owners, it will still have individuals exercising substantial control.)
A company applicant is the individual who directly files the document that creates or first registers the reporting company and the individual that is primarily responsible for directing or controlling the filing of the document, if there is more than one person involved.
If my nonprofit has to file a BOI report, when is it due?
If your nonprofit reporting company was created before January 1, 2024, or, if foreign, was registered in the US before January 1, 2024, its initial BOI report has to be filed with FinCEN by January 1, 2025.
If I form a nonprofit in 2024 or beyond, when is its initial report due?
Initial reports of nonprofit reporting companies created or if foreign, first registered, in 2024 have to be filed with FinCEN within 90 calendar days of receiving actual or public notice of its creation or registration, whichever comes first. The due date is reduced to 30 calendar days for nonprofit reporting companies created or registered for the first time in 2025 and beyond.
What does my nonprofit do if the information it reported changes?
If there is a change in information the nonprofit reported about the company or the beneficial owners, an updated report has to be filed with FinCEN within 30 calendar days of the change.
Where can I get more information about the CTA and BOI reporting?
For more information on beneficial ownership information reporting under the Corporate Transparency Act, see our Corporate Transparency Act resources page or contact us.
Learn how the CT Corporation Beneficial Ownership platform will help you confidently file your beneficial ownership reports.
