According to the CTA (Corporate Transparency Act), certain businesses or entities in the U.S. must file a BOI (beneficial ownership information) with FinCEN (Financial Crimes Enforcement Network) within a stipulated time in every tax year. FinCEN maintains a record of the information of the reporting companies. This report includes information about the reporting company, beneficial owners, and company applicants.
A FinCEN ID is not strictly required for Beneficial Ownership Information (BOI) reporting, but it can be very useful. It can simplify the reporting process by reducing the amount of sensitive information that needs to be submitted.
In this blog, we’ve compiled information on how to acquire a FinCEN Identifier for free and highlighted the key benefits of using one for individuals and reporting companies.
What is FinCEN Identifier?
A FinCEN ID contains a unique 12-digit identifying number that FinCEN issues to every reporting entity or company. Instead of giving the individual personal information, the reporting company can provide a FinCEN ID. Obtaining the FinCEN identifier is not compulsory, but it reduces the headache of the reporting process and maintain privacy.
There are several reasons why an entity should use the FinCEN identifier.
- A FinCEN ID enables you to protect your personal information. As you provide the FinCEN ID in lieu of disclosing personal information repeatedly, the privacy concerns are less comparatively.
- FinCEN identifier simplifies and streamlines the process altogether. After receiving the FinCEN ID, you are not required to compile the personal information multiple times while reporting BOI.
- When a beneficial owner has a share or ownership in different companies, the FinCEN identifier identifies the person with ease. So, the administrative efficiency is a lot more than BOI reporting.
Things to Consider about Obtaining a FinCEN ID?
You have to consider multiple things regarding requesting the FinCEN identifier. If the reporting entity has put an inaccurate statement for the FinCEN ID application, the individual must correct the discrepancies within 30 days of knowing the inaccuracy. The same thing applies to the changing of personal information. The deadline here is 30 days too.
This is an obligation for any FinCEN ID holder, even if they are no longer company applicants or beneficial owners. FinCEN has issued a statement that those FinCEN ID holders will get the deactivation option for deactivating their ID. Although the deactivation option is still not provided.
Which Information to Provide for Applying a FinCEN Identifier?
All the beneficial owners or company applicants must provide the following personal information during the request of FinCEN ID:
- Full name of the company applicant or the beneficial owner
- DOB (date of birth)
- Full address (residential or business)
- Unique identifying number and image of the acceptable ID documents such as driving license, state ID, U.S. passport, or foreign passport from the authorized jurisdiction.
How to Obtain a FinCEN Identifier with Tax1099?
Any entity has to follow specific steps to obtain a FinCEN ID. Go through the below steps:
- Login or create an account at Tax1099 and then select BOI report in the dashboard.
- Start filing in the information about the reporting company.
- Within the steps, you will get an option to fill in your FinCEN ID.
- If you don’t have a FinCEN Identifier, carefully provide your personal information documents and apply for the FinCEN ID for free.
- FinCEN will issue the ID immediately after the submission.
It’s that simple! Now continue filing your BOI report and stay complaint.
Note: Each FinCEN identifier is entirely unique and only one can be obtained per individual or reporting company.
To learn more about how Tax1099 can assist you with every aspect of your CTA compliance, contact us at Tax1099 Support
