On this episode of Adam Talks, tax attorney and IRA Financial’s founder, Adam Bergman, Esq., discusses the Beneficial Ownership Interest (BOI) rules and if you need to file the form for your Self-Directed IRA.
BOI for My Self-Directed IRA?
In this episode of “Adam Talks,” tax attorney Adam Bergman discusses the Beneficial Ownership Interest (BOI) and the Corporate Transparency Act rules, focusing on their implications for various self-directed retirement accounts and entities. Bergman emphasizes the importance of understanding these rules, as compliance is mandatory for entities formed before January 1, 2024, with a deadline of December 31, 2024, to file the BOI with FinCEN. Non-compliance could result in severe penalties, including fines and imprisonment.
The Corporate Transparency Act, a part of the Anti-Laundering Act of 2020, aims to combat money laundering and criminal activities by requiring detailed information about entity ownership and control. Despite a recent Alabama State Court ruling that deemed the Act unconstitutional, the requirement to file the BOI remains in effect for most entities unless the Supreme Court rules otherwise. Bergman explains that the government’s intention is to gather more information to fight financial crimes, although he questions its effectiveness.
Entities required to file the BOI include domestic reporting companies and foreign entities registered to do business in the U.S., with exceptions for tax-exempt organizations, large operating companies, and certain trusts. The BOI filing must include details about individuals with substantial control or 25% or more ownership in the entity. Bergman highlights the complexity of determining substantial control and advises erring on the side of over-reporting to avoid penalties.
For retirement accounts, Bergman clarifies that a plain Self-Directed IRA does not require a BOI filing, but a Self-Directed IRA with an LLC (Checkbook IRA), a Solo 401(k) with an LLC, or a Rollover Business Startup (ROBS) corporation does. IRA Financial offers a service to handle BOI filings for their clients, simplifying the process and ensuring compliance. This service uses IRA Financial’s FinCEN number, relieving clients of the need to obtain their own.
Bergman underscores the urgency of filing the BOI by the deadline to avoid penalties. He advises dissolving inactive entities to eliminate filing requirements and stresses the importance of timely compliance to prevent last-minute stress. IRA Financial is proactively reaching out to clients to facilitate the filing process.
In conclusion, Bergman expresses his hope that the Supreme Court will overturn the BOI requirement but advises compliance in the meantime. He views the requirement as an overreach by the government, unlikely to achieve its intended goals. Bergman encourages listeners to stay informed through various channels and offers support for filing BOI to ensure clients remain compliant with the new regulations.
