Most Church Administrators are well aware of new compliance regulations for businesses and churches alike, but sometimes it can be confusing to know if churches are exempt from such requirements. Most churches operate on small budgets and don’t have experts or legal professionals to help navigate these new laws’ complex wording and language. Sometimes, churches become out of compliance simply because they are unaware of the requirement. If the new Beneficial Ownership Information Report falls into that category for your church, here’s some information that may help.
What Is The BOIR?
BOIR is the acronym for the Beneficial Ownership Information Report. The BOIR falls under the FinCEN (Financial Crimes Enforcement Network) of the U.S. Department of the Treasury. As part of the CTA (Corporate Transparency Act), this report helps prevent money laundering and other financial crimes while improving corporate accountability.
What Is A Beneficial Owner?
Per the CTA, beneficial owners are defined as those who own more than 25% of the business or otherwise exercise substantial control over the business.
When Are Businesses Required To File?
According to the official FinCEN.gov website, companies that already existed prior to January 1, 2024, must file their initial BOIR by January 1, 2025. Companies created or registered to do business in the United States on or after January 1, 2024, and before January 1, 2025, must file their initial BOIR within 90 days after receiving notice that its creation or registration is effective.
How To File A BOIR
A word of extreme caution here – at the time of this post, there are multiple “fake” BOIR sites. A Google search for “BOIR” brings up fake sites: BOIR.com, BOIR.org, etc. Do not fill out the forms on these sites, give personal information, or pay money. Here’s the official link: https://boiefiling.fincen.gov/. Filing is free. Companies can complete the form online or through a PDF to mail in. Before filling out the form, gather the required identifying information (driver’s license, passport, etc.) of the beneficial owners and company applicants, as well as the company’s EIN or SSN/ITIN information. The questions on the report are basic and ask for the company’s name, tax ID, address, applicant information, and beneficial owner information. For most companies, filling out the form will take less than 25 minutes.
What About Churches?
Per Steven M. Woolfe of the National Council of Nonprofits, the BOIR does not apply to the following organizations:
- Defined by section 501(c) of the federal tax code and exempt from federal income tax under Code section 501(a)
- Code Section 527 political organizations;
- Code Section 4947(a) charitable trusts;
- Wholly owned subsidiaries of the nonprofits listed above (FinCEN recently clarified that if an exempt entity controls some, but not all, of the ownership interests of the subsidiary, the subsidiary does not qualify for CTA exemption); or
- Operated exclusively to provide support to any of the nonprofits listed above.
This means all churches registered as a 501(c)(3) organization are exempt from completing the BOIR. However, if your church feels compelled to complete the form, use the check box for exempt organizations (like a church), allowing the church to complete the form without filling out most of the report, like the beneficial owner information, since it doesn’t apply.
While the deadline for filing the BOIR for most companies is looming and hefty daily fines for non-compliance as motivation, most churches can rest easy knowing they are exempt from this new requirement.
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