The Corporate Transparency Act and nonprofit organizations

Which tax-exempt entities are exempt from reporting to the BOI?

There are three types of tax-exempt entities that qualify for the “tax-exempt entities” exemption from reporting to the BOI:

(1 second. 501(c) Organizations - An organization described in Sec. 501(c) of the Internal Revenue Code (Code) (determined regardless of whether it has filed an application for recognition of tax-exempt status with the IRS under section 508(a) of the Code) and that is exempt from taxes according to Second. 501(a) of the Code.

Second. 501(c) organizations include most charitable organizations, churches and other religious organizations and private foundations.

If a sec. A 501(c) organization loses its tax-exempt status, it will still be considered exempt for 180 days from the date it lost its tax-exempt status. If you fail to restore your tax-exempt status within that period, you will have to file a BOI report unless you qualify for another exemption.

(2 seconds. 527 political organizations - A political organization, as defined in section 527(e)(1) of the Code, that is exempt from tax under section 527(a) of the Code.

This includes a political organization organized and operated primarily to accept contributions and/or make expenditures for an exempt function, such as the function of influencing the election of an individual to public office; either

(3) Sec. 4947 trusts - A trust described in paragraph (1) or (2) of section 4947(a) of the Code. (Charitable trusts and split interest trusts).

Which tax-exempt entities are not exempt from reporting to the BOI?

Tax-exempt corporations, LLCs, or other entities created by filing a document with the secretary of state or equivalent office, other than the three listed above, will be required to file a BOI report unless they qualify for another exemption.

If my nonprofit is exempt, are its subsidiaries also exempt?

Any entity whose ownership interests are wholly controlled or wholly owned, directly or indirectly, by one or more nonprofit organizations that are exempt from reporting to the BOI under the “tax-exempt entities” exemption are themselves exempt. to report to the BOI under what is called the “subsidiary exemption of certain exempt entities.

What happens if a nonprofit that was exempt from reporting to the BOI no longer qualifies for an exemption?

A nonprofit organization that was exempt from reporting to the BOI, but is no longer exempt, must submit its initial report to the BOI within 30 days of no longer qualifying for an exemption.

Are entities that assist tax-exempt entities exempt from BOI reporting?

There is an exemption from reporting to the BOI for what is called an “entity assisting a tax-exempt entity.” This is defined as any entity that: (a) operates exclusively to provide financial assistance or have governance rights over any entity that qualifies for the BOI reporting exemption as a tax-exempt entity; (b) is a US person; (c) is beneficially owned or controlled exclusively by one or more United States citizens or persons lawfully admitted for permanent residence; and (d) derives at least the majority of its funds or income from one or more United States citizens or persons lawfully admitted for permanent residence.

Please note that while entities assisting tax-exempt entities are exempt from reporting to the BOI, any subsidiaries they control or wholly own are not eligible to be exempt under the “subsidiaries of certain entities” exemption. exempt.”

If my nonprofit is required to file a BOI report, what information will need to be submitted to FinCEN?

The following information must be reported about the nonprofit organization:

  • Your legal name
  • Any trade name and dba
  • Your main address
  • Your training jurisdiction
  • The jurisdiction where you first register to do business in the US if you are a foreign reporting company
  • Your IRS taxpayer identification number

Likewise, the following information must be reported about each of your beneficial owners:

  • Your legal name
  • Your date of birth
  • Your residential address
  • A unique number of an acceptable document, such as a passport, driver's license, or state ID, the jurisdiction that issues the document, and an image of the document.

Additionally, nonprofit reporting companies formed in the U.S. on or after January 1, 2024, and foreign reporting companies registering to do business in the U.S. for the first time on or after January 1, 2024, January 2024, they will have to provide the same type of information. for the applicant or applicants of your company which must be provided for a beneficial owner, except that persons acting as applicants for the company in the course of their employment provide their business address instead of their residential address.

For more information, read Beneficial Ownership Information Reports: What Information is Required?

Who are considered beneficial owners and applicants of nonprofit reporting companies?

A beneficial owner is a person who directly or indirectly exercises substantial control over the reporting company or who owns or controls at least 25 percent of its interests. Persons with substantial control include senior officials, persons with authority to appoint or dismiss senior officials or a majority of the governing body, and major decision makers. (Note that FinCEN has stated that even if a reporting company does not have individual owners, it will still have persons who exercise substantial control.)

A requesting company is the person who directly presents the document that creates or registers for the first time to the reporting company and the person who is primarily responsible for directing or controlling the presentation of the document, if more than one person is involved.

If my nonprofit is required to file a BOI report, when is it due?

If your nonprofit reporting company was formed before January 1, 2024 or, if foreign, was registered in the U.S. before January 1, 2024, your initial BOI report must be filed with FinCEN by January 1, 2025.

If I form a nonprofit in 2024 or beyond, when must it file its initial report?

Initial reports for nonprofit reporting companies created or, if foreign, first registered in 2024, must be filed with FinCEN within 90 calendar days of receipt of public or actual notice of their creation or registration , The thing that happens first. The due date is reduced to 30 calendar days for nonprofit reporting businesses created or first registered in 2025 and thereafter.

What does my nonprofit do if the information it reported changes?

If there is a change in the information the nonprofit provided about the business or beneficial owners, an updated report must be filed with FinCEN within 30 calendar days of the change.

Where can I get more information about CTA and BOI reports?

For more information on reporting beneficial ownership information under the Corporate Transparency Law, see our Corporate Transparency Law Resource Page or contact us.

Learn how CT Corporation Beneficial Owners Platform will help you confidently file your beneficial ownership reports.

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