BOI Reporting and Unauthorized Disclosure Penalties Increased
The Financial Crimes Enforcement Network (FinCEN) has announced that inflation adjustments have significantly increased civil monetary penalties for violating the beneficial ownership information (BOI) reporting rules and for the unauthorized disclosure or use of BOI. The penalties are included for the first time in FinCEN’s annual final rule providing the list of inflation adjustments of civil monetary penalties within FinCEN's jurisdiction.
The increases, which were posted in the Federal Register, are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, P.L. 101-410, as amended.
Effective Jan. 25, the penalties for BOI reporting violations and for the unauthorized disclosure or use of BOI are each increased to $591 a day from $500.
The penalties were established in 2021 when the Corporate Transparency Act (CTA), which mandates BOI reporting, became law. Because FinCEN's regulations for the CTA were not yet effective, the penalties were not published previously, FinCEN stated in the Federal Register.
As of Jan. 1, 2024, most companies created in or registered to do business in the United States must report information about their beneficial owners to FinCEN as part of an anti-money laundering initiative.
To calculate the adjustments for BOI penalties, the adjustment multipliers from 2022, 2023 and 2024 were applied to the civil monetary penalties established by the CTA.
The rule also increases penalties for 10 other violations, including willful or grossly negligent recordkeeping and willful violations of Bank Secrecy Act requirements.