June 18, 2024

New Scams Prey on Corporate Transparency Act Reporting

The Corporate Transparency Act was passed in 2021 and became effective on January 1, 2024. The legislation aims to increase financial transparency and counter illicit financial activities, including money laundering and terrorist financing. To comply with the new regulations, many business owners are required to report Beneficial Ownership Information (BOI) to the Federal Crimes Enforcement Network (FinCEN). This includes personally identifiable information (PII) of each business owner, including taxpayer identification number, amongst other data points. The information is required to be submitted electronically on the FINCEN website.

While it is easy to submit the necessary information, it has also become a target for scammers. Several scams have been reported targeting business owners unfamiliar with the filing process. These include correspondence requesting payment, prompting the use of a false website or QR code, and a request for information from the US Business Regulations Department. These are all fake, and business owners should avoid falling victim. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.

BOI Reporting Scams

There are several types of scams currently being reported by FINCEN. In all cases, the bad actors are attempting to gain access to personal information only to later use it for fraudulent purposes. These include:

• Payment Requests – There have been many reports of business owners receiving what appears to be official mail from the federal government requesting a filing payment. It alleges that payment must be received in order for BOI to be officially filed. This is a lie. There is no fee to file BOI information with FINCEN. In fact, the agency has never sent any correspondence requesting payment to file. Filing is free and can be completed on the FINCEN website. Do not send money as a response to any correspondence that claims to be from an official agency.
• QR Code or URL Link – There have also been reports of e-mail correspondence directing the recipient to scan a QR code, click on a URL, or open an attachment. These are fraudulent and will take individuals to websites designed to steal personal information. It is important not to click on any suspicious links, attachments, or scan QR codes received through email or direct mail.
• Form 4022 – Many taxpayers have received a mailing ask them to complete Form 4402 or an Important Compliance Notice. This scam applies significant pressure to recipients by claiming there is a failure to comply penalty of $500 per day plus the possibility of prison time. While there are penalties for noncompliance, these only apply to situations where there was willful noncompliance and do not apply to those who forget to file. More importantly, the actual fines significantly differ from those outlined in the Form 4022 scam.
• US Business Regulations Department – Any mail received from this fictious federal government agency should be discarded. There is no government entity using this name. Any information contained in these correspondences is completely false. When receiving any communication from a government agency, it is important to verify the validity of the content.

BOI Filing Process

Relevant data must be reported through the FINCEN website using the BOI E-Filing System. There are two ways to file BOI information, including a PDF submission using the agency’s digital form. Submitting a PDF is straightforward; the filer completes the form, submits it, and then downloads a transcript upon completion. The other requires all information to be submitted through a secure online form. When completed, the filer can download a copy of the filing transcript.

Contact Us

The Corporate Transparency Act requires many business owners to report Beneficial Ownership Information (BOI). Unfortunately, bad actors have unleashed several scams designed to steal your personal information (including Social Security Number or Taxpayer ID). Before responding to any communication, carefully consider its validity. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information, call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.