Corporate Transparency Act for Dental Offices

Are you an LLC, a PLLC, or a corporate entity? Be aware that Congress passed the Corporate Transparency Act in 2021. The new federal reporting requirement for beneficial ownership information goes into effect beginning January 1, 2024. The goal of this new law is to prevent money laundering and other financial crimes, including terrorist financing.

Reporting Requirements for Beneficial Owners

Individuals who own or control the company are referred to as “beneficial owners” and are required to report their beneficial ownership interest (BOI) to the federal government. In the words of the U.S. Department of the Treasury Financial Crimes Enforcement Network, this new law will make it harder for bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

Exemptions to the Law

There are exemptions to the law. Publicly traded companies, nonprofits, and certain large companies are exempt from reporting. Also exempt are sole proprietors.

There are actually a total of 23 exemptions listed in FinCEN’s Small Entity Compliance guide.

Large Operating Entity Exemption

To meet the large operating entity exemption, the business must meet all three of the following thresholds:

1. Operate from a physical commercial street address in the U.S.
2. Have 21 or more full-time U.S. employees.
3. Generate more than $5 million in annual U.S. gross receipts as reported on the prior year’s tax return.

However, we anticipate this new federal law to affect many of our dental practices that we serve.

Compliance Requirements

In order to achieve compliance, you must report personal identifying information, including your name, date of birth, physical home address, and your photograph.

Deadlines for Reporting

• If you formed your business prior to January 1, 2024, you have one year to comply with reporting.
• If your business is formed between January 1, 2024, and December 31, 2024, you have 90 days to report.
• For businesses formed after January 1, 2025, you have 30 days to report.

Access to Reported Information

Who has access to this information that you report? Law enforcement at the federal, state, and local levels have access, but such information will not be available to the general public.

Penalties for Non-Compliance

If you fail to report, the fines range from $500 per day up to $10,000 per incident.

How to Report

You report your beneficial ownership interest through FinCEN’s website: www.fincen.gov/boi.

Stay compliant with the Corporate Transparency Act.