Simons, Thurman & Fix, P.C.

Serving Rockbridge County for 30+ Years!

Fraud Alert – Mandatory Beneficial Ownership Reporting

The Corporate Transparency Act, passed in 2021, requires most businesses to report information about the business owners to the federal government. To enforce the mandatory reporting requirements, the federal government created the Financial Crimes Enforcement Network (“FinCEN”) accept Beneficial Ownership Information Reports (“BOIR”) from all required entities. The stated goal of the CTA with the BOIR requirements is to combat money laundering and terrorist financing.

With all new laws comes the inevitable fraudsters attempting to exploit people simply trying to comply with their obligations as citizens.

One of our business owner clients received a “Form 4022” requesting that he fill out a mandatory beneficial ownership reporting form with a filing fee of $118 to the “US Business Regulations Dept”. This form is fraudulent. The FinCEN does not have a Form 4022 and there is no filing fee to comply with the BOIR requirements. Entities may only comply with BOIR requirements through the official FinCIN website. If you receive any such forms requesting your personal information or any type of filing fee, immediately discard the form as fraud.

The form our client received looked very similar to actual government forms. If our client had not thought to run this past us, he may have ended up revealing his personal information as well as sending scammers money.

Business owners absolutely do have to comply with the new BOIR laws. However, you must report through the official FinCen system or you risk losing not only your money but your personal information as well. There are several exceptions to reporting and several complexities involved in the reporting process. We have helped several clients through the BOIR process since the law was enacted.

As always, our attorneys are here to help clients through any issues involving small business ownership. If you have any questions or need help completing the BOIR forms, feel free to give us a call today.