← AICPA Town Hall
AICPA Town Hall
BOI update with FinCEN and election insights
01:00:38
Topics include: DC and profession update BOI discussion with FinCEN Key technical updates Speakers: Erik Asgeirsson, President and CEO, CPA.com Mark Peterson, EVP, Advocacy, AICPA Melanie Lauridsen, VP, Tax Policy and Advocacy,...
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- [00:01]
A
Welcome to the AICPA Town Hall Series, your resource for the latest news and updates on pressing issues facing the accounting profession.
- [00:11]
B
Good afternoon and welcome to the AICPA Town Hall. I'm Eric Ouskerson, one of your hosts for today. We've got a great program in store. As you all know, a lot has happened this week, so I'm going to kick things off with Mark Peterson to talking about the election outcome. And we're gonna do our best to unpack how we see a number of scenarios related to future tax legislation, as well as discussion around the different regulatory entities and how they will change under the Trump administration. We're then gonna have a BOI discussion with one of the leads of the Business Ownership information initiative at FinCEN, FinLam and Melanie Laridson will be leading that. Then we're going to have. Melanie's going to provide the technical update portion of today's Town hall and then we're going to conclude with our open forum. So please do bring us questions. So with that, Mark Peterson, you and your team, I know this has been a busy week. You made some predictions. Not on, you know, you know, the outcome of the election, but I know on the last town hall we, you discussed when you thought we would have the results by, and I think they, they came out a little. The results came out sooner than everyone was expecting. But this is really looking forward to getting into it with you today. So welcome.
- [01:48]
C
They did. They did. They came out sooner. I'm part of my strength, Eric, is to admit when I was wrong on a prediction, and that was one. But let's talk about it. I mean, everybody knows the outcome of the election. You know, the fog is clearing from, you know, these states. Parties are digging in to try and understand what happened. And this is true of Republicans and Democrats. There are two voices in the losing party. One voice says this is an indication that we need to pivot, that we need to think differently, message differently. The other side of that same party says we had the right message, we just weren't loud enough, we weren't aggressive enough. And so you can see that debate playing out right now on, in this case, on the Democratic side of the aisle, you know, as the outcomes are still coming in and it will take a while to really understand what happened. But you're right, you know, we were watching the polling and the polling had it extremely close with, you know, trending within the margin of error to former President Trump. All indications led to it taking several days to figure out the winner. But he outperformed pretty much outperformed in every segment of the former Biden coalition, which very quickly brought victories in those east coast states of Pennsylvania and North Carolina and Georgia. And so it was a lot earlier than I would have predicted. Now, there are, and we're going to talk about this, there's still some, some states we're hearing back from a congressional level. I want to mention Eric, too, because, you know, we always lead our political discussions with the fact that we work with whichever administration we get. We work with whichever, you know, whoever is, is has the gavels in the House and the Senate. Our priorities will change. We have to keep an eye on the politics to understand the best way to deliver good outcomes from the profession. But we're going to be able to work with this administration and this Congress. But there will be some changes. I mean, that's elections matter and that does create change in Washington, Mark.
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B
Absolutely. And we've been holding these town halls, Mark, for four years. We kicked it off during the pandemic. At the start of the pandemic, we had the Major Cares act and then your advocacy team playing a critical role, kind of connecting and communicating with our elected officials, cabinet members. And that when you look at what has happened this week, it seems like there's another moment. It's another moment where the firms and members in business and industry are going to have to step up and provide direction and advice based on some significant change that's, that's going to come forward Both in the 2025 tax changes, which we'll be getting into, as well as changes to the overall regulatory setup in the, in the different cabinet positions.
- [04:42]
C
There will be change. That one that I'm certain of, Eric. There will be change and you know, again, new administration take, take Congress off the table. The administration has the ability to set forth an agenda through the regular regulatory power of the agencies. You know, we're going to be watching very closely who goes to treasury, you know, who goes to the sec, who goes to the sba, you know, what's their background, what are the agendas that they're looking to implement and then try and figure out how can the profession fit into that, where maybe we want to take a message to them of some areas where there could be improvement, areas that we could partner on. We've been very successful with that in the past. And then some areas where there are some challenges and there's opportunity for some change potentially. The other thing I will say is to change is constant here. So as we sit here today, the way this is lining up we see one picture. Two years from now, you and I could be having a very different conversation, but we should talk about the House and Senate.
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B
Well, let's do that, Mario. I just want to tell you there's a lot of interest. We've got over 10,000 attendees on today's town hall. So, yeah, let's look at where things stand in the House and the Senate.
- [05:57]
C
Yeah. So this slide is actually from last night. You can't print them fast enough to keep up. But the Senate again has moved, moving to Republican hands of no surprise victory in West Virginia. Picking up, you know, Ohio and Montana. Still waiting to hear from Pennsylvania and Nevada unless it comes in while we're talking. Eric. So that's going to be Republican majority in the Senate moving forward. Now, one or two seats does make a difference. Just to remind everybody, whatever the ratio is on the House or Senate floor also cascades into the committees. And one or one or two seat majority can make a difference in moving legislation through those committees. So it really does make a difference. And then on the House we have yet to hear, but it does appear, and the projections are the Republicans will maintain the majority. There's less than 40 seats that are still outstanding. That is mostly about the counting because they have not been certified or called yet. But for the most part, we can tell where they are. There was a couple vacancies when they left town, before the vacation. Excuse me, before they went into recess. Certainly wasn't vacation. If they were running, which was three vacancies, it was 220 to 212 Republican majority. They could come back kind of in that territory. 220, 223 to around 212. So again, it's narrow. It is a trifecta. Same party, White House, Senate, House of Representatives. I call it a skinny trifecta. Because no matter what, and really what's being determined right now in these House races is the size of that Republican majority. It's gonna be narrow. And at any given time you can have some vacancies. Any given time, you can have a group of grumpy members of Congress that are gonna oppose their leadership, which we've seen before. What you see, though, is in the areas that the party agrees, and this would be true if it was the Democrats. For the Republicans, they're going to agree on things, you know, with concern on esg, they're going to agree on tax cuts, they're going to agree on reduction of business regulation. So those are the things that you can see moving forward. There may be some disagreement on Funding. I think we're going to have that discussion in lame duck as we get into a lame duck. But, but, but again, you get the majority, even by one vote, you own the gavels. That means that you own the agenda. It means it's what you can put on the floor. And then you got to figure out how to find the votes. We will see. It'll be interesting. We still have lame duck, Eric, so they got to come back. Government funding runs out on December 20th. They've got to figure out when they're, how much, how long they're going to fund it again. We'll see if that gets into tax season. Kind of think that maybe the Republicans with the way this has played out, would like to prefer a longer funding period of time. But there will be a debate about that too because it also means once you have the gavels, then you have more leverage on what can be included in those funding bills. Definitely going to be some funding for disaster relief, potentially some legislation we support around making creating clarity more quickly around disasters. Maybe a delay, one year delay on BOI requirements. Count on that. But it's a possibility. So it's going to be really interesting to get them back to get a sense of what the agenda is going to look like next year and then how this lame duck plays out.
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B
Well, Mark, you're already hitting some of the questions and what one was about boi. So just in summary here, so I like skinny trifecta. The House looks almost certain to go Republican. Just a question of what, how skinny that majority will be. One thing I do want to raise to our audience here, you look at a lot of pollsters. This new pollster, this market based pollster called Poly Market. This morning the CEO Shane Coplin was on Squawkbox and they predicted it hours in advance. And they actually called all the states correctly using this market based information, which was based on some wagering. And they actually have it very, very likely that the House will go Republican and It'll be over 220 seats for the Republicans. Something like that.
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C
Yep. That's jiving with what we were hearing.
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B
So Mark, moving on to the actual potential tax policies under the Trump administration.
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C
Yeah. So I mean, two big. There's gonna be a lot of things that we're gonna have opportunities for as a profession as we assess a, as we assess the new administration. Two big things though that we're gonna be talking a lot about on the town hall. The first is tax. There's gonna be a tax bill. We've been saying that all the expiring provisions of the tcja. That is all headed towards a debate next year. And so we know where the Trump camp stands. Reducing the rates at the corporate level, the individual level. There's definitely gonna be discussion around salt on 1099K. We have initiatives, the SAFE act, which is about automatic extensions of 125% of previous year disaster relief unless it gets taken care of the lame duck. Those are all things that are definitely in the mix for a discussion. There's kind of three things you need to think about what they move forward on. As far as here is the legislative framework of the legislation, then is it going to be paid for or not? If it's going to be and that will be a debate. I think it's less likely that the Republicans will make sure that there are offsets to pay for this just because of their pro growth philosophy. But those pay fors are things we have to watch as well. Previously we've seen them that impact partnerships, Eric, and so that can impact the profession. There are other issues we're following. Is there going to be any type of, you know, nonprofit reforms that will be included in this? So it will be a significant effort. There's different ways that it can play out and we'll talk about that on the next slide. But the other thing is the timing. And you know, we particularly if you're a tax practitioner and you're very interested in when all this is going to get timed, get sent to the IRS for implementation and how's that going to impact you and your clients going into next season? Don't know. We're going to have to see how this plays out. We're going to see how people line up around these initiatives, you know, and where, where the votes are and how they look.
- [12:43]
B
Well, Mark, you and I were talking about this before the town hall today that you know, a lot of talk about the deficit and you know, the strategy here, Mnuchin, former Secretary Treasury Mnuchin was on TV earlier this morning and he was echoing what you're hearing from a lot of the, you know, people connected to the Trump administration is it's a growth strategy. It's a growth strategy related to how they're going to address the deficit in many ways. And also when you look at what's happening in the markets, the bank stocks are up a lot. There's a lot of discussion that there's going to be a lot of MA looking at the firms here, the trust advisor role that they play, one is related to tax planning and tax advice. But there seems to be, there's going to be a big business boom related M and A. And also the small and mid sized cap companies are doing very well because there's a lot of discussion about some of the tariffs driving more business back to the US and that will impact a lot of the smaller entities here in the US in the Russell 2000.
- [13:49]
C
It does. I mean, again, change of administration is significant and there's an impact, you know, there's an impact on the business community. Play both sides of that, whether it's good or bad. But there's an impact that clients have to react to and we have to react to as well. And deficit will be in the discussion. There is growing discomfort with the size of the debt. We've got thought leadership around that about making some requirements around Congress having a discussion about the financial statement of the US Government. Having said that, the votes are there if it's the right package to move forward. But there will be a debate, definitely.
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B
Okay, Mark, this is one of your other prediction slides and you had it. You had the trifecta. You didn't call it the skinny trifecta, but you had the trifecta outlined on this slide.
- [14:40]
C
It was one of them. And like I said, you know, when we were looking at the different scenarios, divided government, you know, a trifecta Democrat, trifecta Republican, you know, who's in the White House is very subjective, the team and you know, going through this. But you know, one of the concepts was there just gonna be this big, big bill similar to TCJA where they had the ability to move something. Was there gonna be a skinny smaller bill that would really just kind of cherry pick the extension of the most popular provisions. You know, were they going to do something on salt? I think that the likelihood of something around salt is still there with a trifecta. More likely that it's a bigger bill because of the alignment of a trifecta on the Republican side and the fact that, you know, President Trump wants to renew what he believes is his successful TCGA bill. You know, there are some tax administrative issues as well that, you know, we're very, very concerned about operation and the health of the irs. And there are other issues like the extension bill that I mentioned, automatic extension bill I mentioned that are also in play. I mentioned the potential for something in lame duck. I think that it got less likely for, you know, something to happen as we look at it today. But before I make that commitment, I'd like to see when they get back they could cherry pick disaster out of there though, in order to do something. So, you know, we did some scenario planning. We're going to have our discussions with them. When they all get back, all the committees will start to do their agenda planning and then they'll lay out the their legislative calendars.
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B
And mark, regarding the December 20th or 21st government funding 20th, how does that play out here in lame duck?
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C
Well, historically, lame duck has started out very ambitious, where they want to do a lot and then in the end it usually dwindles down to what they must do. They must fund the government, otherwise there's a shutdown. I think they will, I don't think there'll be a shutdown. The question which I pointed out before is what's the length of time? Is it just an extension where they kick the can down the road of current funding or do they actually do what's called an omnibus where they put the spending proposals all together in one big bill? All that is riddled with politics and the leaders are going to come back to town having looked at the election results and figure out how to do that. But it will have an impact on us. So we'll be watching it closely.
- [17:19]
B
Well, Mark, here's a slide with a lot of images on it. And I mean your team, you're going to be busy with what's happening in the legislative side, but this is going to be an extremely busy 100 days for you, 60 days for you as you think through how you want to advocate for what's going to happen with these different agencies.
- [17:38]
C
Yeah, and again, you think about obviously treasury and the irs, the SEC and the pcaob, Department of Labor, sba. You know, we do work with many of the agencies in government. So the way this plays out is you will start to hear names floated of heads. That's going to probably start tomorrow. There's a vetting process. There's been some pre vetting. There's a vetting process at which they vet the candidates for these roles in order that they can withstand confirmation to get it through the Senate. Now again, the Republicans are going to enjoy the fact that it's their administration, so they're likely to vote for their candidate. But one of the tests is could they withstand a 60 vote filibuster. So, you know, basically they would have to gather some Democratic votes in order to move a candidate for one of these agencies. So we'll see the names, we'll start to understand their background and their agendas and then they'll go through a confirmation process that takes some time what they usually do is the State Department, Defense, treasury, they will move more quickly on those. And then they will kind of get to the SEC and some of SBA and some of the others that they'll have to get through the process. So that's kind of part of it. Then they get into place, and then we figure out how the administration's working with Congress. And, you know, I'll give you an example of that, because it's going to impact U.S. treasury and the IRS. So there will be a fight over funding for the irs. What should the IRS be funded at? I think that with this incoming Congress, we should expect that that funding will likely be. There'll be downward pressure on it, less funding for the irs. If you remember, in the IRA bill, the green tax credit deal out of the Biden administration, they had increased enforcement budget at the IRS significantly. There's going to be downward pressure on that as well. And so it's getting the agency heads set up, getting them confirmed, and then they have to interact with this new Congress to get their funding and to get their authorization. Those are all places that we're going to be playing. You and I talked about PPP and sba. You know, these are also opportunities for us to go in with a new administration, you know, engage with them, talk about what we see in the market and opportunities to work together in a public, private way.
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B
Yeah, well said, Mark. I mean, you hit a couple of the questions that came in. One was related to the funding of the irs. How about just a couple questions on the process of the IRS commissioner. How does that work? I'll give you some breaking news. I mean, that happened just before we went on Powell, the Fed. They did raise rates by a quarter of a point. I mean, lower them. Sorry, lower the rates by a quarter point. And Powell even said, Powell said in his remarks that he won't resign if Trump asked him to. So I don't know if that'll be. That'll be helpful. But just why don't you. I mean, so you can comment on that and also comment on the process for the IRS commissioner.
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C
Yeah. So that there's been different examples in history. A lot of times they leave the IRS commissioner alone and the IRS commissioner will serve into a new administration for continuity. But it also depends on the level of controversy around that IRS commissioner. And so that debate yet to happen. I don't want to make any guesses right now, but you know, treasury and the administration can put a lot of pressure on somebody to step down, even if they have time left in their term and they don't need to be reconfirmed. So, you know, that is yet to play out. I mean, I don't see a ton of controversy like we've seen. You know, if you think back to Koskinen and some of the issues around, you know, Lois Lerner and missing databases and things like that. I don't see that. I think there's going to be a ton of focus on the secretary of treasury and getting that person up to speed. Confirmed up to speed. And treasury rolling.
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B
Got it. So. And as you said, that's happened in the past where the IRS commissioner stays on, but they'll select the new secretary of Treasury.
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C
That's where the focus will be.
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B
There'll be focus on that. And then Powell right now, I mean, hopefully Powell is in a situation where his term is not ending for a little bit of time. So. Okay. Well, Mark, there is one other huge agency that has a big impact on the profession, something that we've talked a lot about here on the town hall. So and this is something that there is some precedent over the last couple of administrations.
- [22:29]
C
Yeah, there is. So, you know, PCAOB is under the created under sox, under the sec. It's actually a nonprofit corporation that is, you know, the employees aren't even on government scale. So it's designed to be at arm's length. The funding for the PCAOB are through fees that the firms pay and licensees versus, you know, through an appropriation we have seen because of expiring terms in previous administrations, wholesale change, all five board members going that is possible. We'll yet to see it play out. I think that first there is going to be a focus on naming somebody to the sec. We've heard some names, some former commissioners have been that we know and have worked with in the past have been named as possibilities. Again, they've got to get through a process and then that will happen. First, I'll go back to Erica Williams, who's the current chair at the pcaob. It took her almost seven months into the first Biden term, into the first year of that term to actually get named and set up. They had an acting board chair until that because they focused on the sec, which came after treasury and some of the other high profile agencies. Then they moved to the SEC and it took a while to get Williams named. So I don't know about the timing. They would, they would just like a commissioner. They would stay in as an acting, you know, if a term had expired. So but what I do believe is there's going to be change. Whether it's wholesale or partial, I don't know yet. But there will be significant change. There's a couple other things, too. There has been legislation to actually take the pcaob. This is a structural change. Take the PCAOB and put it under the sec so it becomes like a division of the sec. There was legislation that was introduced in the House of Representatives wasn't going to go anywhere at the time because the Biden administration wouldn't sign, it wouldn't get through the Senate. But you know, it scored out of savings, which means that it saves some money. And it showed up in several of the Trump budgets. And so that is definitely on a list for consideration. It also was sponsored by one of likely going to be one of the chair or subcommittee chairs of the House Financial Services Committee. So we could see some structural change there at the pcaob. We'll definitely feel a change in tone. There's been a lot of pressure coming from this PCAOB and SEC and some of the critics in Congress around audit quality and around the firms. And I think that their discussion around historic numbers of enforcements, historic levels of fines being paid, I think that that environment is going to change. They're still a regulator. They're still going to be, you know, focused on quality. But I think that environment is sure to change.
- [25:30]
B
Well, Mark, thank you. And a nice comment came in from one of the attendees, said listening to you is high quality cpe. So great, great update. You're going to have this be a busy 90 days. The town hall is going to stay on of the top of everything that's going on from a legislative standpoint and from a cabinet official standpoint in these different agencies. So, Mark, you and I will be back during Open Forum, but now I'd like to bring up Melanie laridson and Phil. So, Melanie, I'll let you introduce Phil and I'll be back in a little bit.
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A
Well, thanks, Eric. And I'm actually very excited to introduce Phil Lamb, who is the Beneficial Ownership, operations and innovation chief at FinCEN and he leads the efforts to enhance transparency of corporate ownership for FinCEN by investigating money laundering, terrorism financing and other financial crimes. So, Phil, welcome. And can you please provide a quick background on BOI for those who haven't been following BOI closely?
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D
Sure. And thank you, Melanie, for inviting me today. So Beneficial ownership information, or BOI, is what we're calling the program here at FinCEN that enacts the Corporate Transparency Act. So that is an act that was enacted by Congress back in 21. What the act aims to do is to close a loophole that we've had here in the United States where companies can create shells and shells of companies anonymously. And so this reporting rule started this calendar year on January 1, where companies are now filing with FinCEN, the company name, and then the people that own or control the company. And so this is a federal requirement across the board. We estimated over 30 million companies would need to file by the end of the year. And so thank you for the opportunity to talk more about it.
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A
Great. So the estimate was 30 million. And can you share how many people have already filed and any insights that you're gaining from these filings?
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D
Sure, sure. So as of this past week, we've crossed over six and a half million filings. Now, this is tracking more closely towards new businesses that have been created this year. So for those that are following the deadlines for this requirement, for companies created this year, in 24, you have 90 days from your creation date to file with us. And for companies that are created previous to 2024, you have until January 1st. So that big deadline, the 30 million, that's kind of coming up on January 1st.
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A
Okay. And so six and a half million to 30 plus million, there's a little bit of a gap there. What have you been doing to raise awareness?
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D
Sure. So we understand this is a new requirement for many of the American public. FinCEN is a new name, it's a new entity. So we've been working hard, the first this whole year and a little bit before, to bring awareness of what FinCEN is, what our mission is, we're part of the Department of Treasury, and then talk about what this requirement is. And so we've been working hard to provide guidance, really a lot through our website. So on fincen.gov boi where you can see a lot of all of our public materials. And I know the AICPA and others have been creating some materials as well. We really appreciate that. And so our strategy in the first half is to work with partners. So work with entities like yourselves and the CPA societies, work with our Secretaries of State at the state and local jurisdictions, as well as other organizations such as the Small Business Administration and the irs. So we create those strategic partnerships to help spread the word. And now we're also working to reach directly to businesses. So whether they be in person, events, where we go across the country and talk to small business owners directly or through mass media. So we've held a little bit back because of the election. But you should start seeing more tv, radio, newspaper, sort of education ads out to the public.
- [29:58]
A
So you know, we've had conversations before and you know that our people definitely have some pain points. So what are you doing to be able to understand people's pain points for filing?
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D
Yeah, so similar to what we talked about before, we really value our partners insights and inputs as they have more of a direct connection with the businesses. So talking across the societies, across all the states and jurisdictions, we take a lot of our feedback from the tickets and inquiries we get directly here at FinCEN. So@fincen.gov so you can ask us questions, you can sort of get, get feedback directly from us as well as going out directly to the business owners. What we have found, Melanie, is that businesses that do take a look at our website absorb a bit of the content. They come back and they understand that it's actually a pretty easy filing requirement for many, many businesses. Many businesses are sort of simple ownership structures and that they've been able to file within 20 minutes. And so that's something we've been trying to enhance our guidance around that as well as working to make sure that the website and the filing process is as seamless as possible.
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A
So one thing as you know, is most reporting requirements have a tendency to exempt the small firms. Yet BOI requires the little guys to file. When it seems like the big companies are getting out of the tedious requirements. Can you go over who needs to file?
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D
Yes. Yes. So the companies that have to report are companies that were created by filing paperwork with their secretary of state. So think of your LLCs, think of your corporations. Those are the companies that are called reporting companies. Now there are exemptions. So there are 23 classes of exemptions. A lot of them are exempted because these companies have already provided this similar type of information to the federal government. And that's to your earlier point on why those companies are exempted. Right. So tax preparers, for example, are exempted. And banks and companies that are listed on a public exchange, they're exempted. And also large entities.
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A
Can I clarify when the tax preparer. Because I do know the exemptions say accounting firms, but it is those that are registered right under SARS B and Oxley section 102. So for public audits is really what they're exempt for.
- [32:38]
D
So thank you, Melanie. Yes.
- [32:41]
A
Perfect. Okay, so million dollar question here. Can a CPA offer BOI services?
- [32:47]
D
So anyone can offer BOI services to help a company file their beneficial ownership information report if the company allows them to do so, so it could be an employee, obviously the owners themselves or any third party that the company decides to authorize to help them provide this information to the federal government. Now, whoever the person is that is entering the form in should be expected to provide a little bit of information about themselves, their name, their email and then a certification, then that's a checkbox certification that the information that's being provided to the government is accurate and complete.
- [33:32]
A
Okay. And I know we've talked in the past about the certification language and certification may have different meanings and it can be of a concern for us. So hopefully we can work through that. There's also a lot of concern around all updated and corrected reports being due within 30 days. Can you share your reasoning around that 30 day time frame? Why 30 days?
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D
Sure, sure. So we understand that the 30 day update requirement is different than what other regimes have in terms of reporting. And we've talked about this too with your constituents as well. And we understand that on the other side of it is that we are a bureau under Treasury's Office of Terror and Financial Crisis and Financial Intelligence. And the rationale for us to putting this together is that we have accurate and up to date information. So in sort of balancing both the mission requirements and the and the realities of reporting, the 30 days was what was settled into in terms of our when we created the rule and wrote the rule. Now we understand that that can be a challenge, but what we do hope to do is make it as easy as possible for folks to file with us and to update their information. One thing that folks can do is that if you have to do many filings, we have a tool called the FinCEN identifier or FinCEN ID where you can create a FinCEN ID, give us your information once and that populates across all your forms. And if you do have to have an update, just update the FinCEN ID and that's all you have to do.
- [35:23]
A
So it streamlines the process, it helps with that process.
- [35:26]
D
That's right. That's right.
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A
So Phil, what actually triggers an updated filing requirement? There's some confusion around it. Some people have said anytime a driver's license expires, that is no longer the case. Can you tell us what triggers.
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D
So an update's required when the information on a report. So we think about reports in terms of companies. So company has a report, then they report the people underneath that company that are beneficial owners. So if a person changes, that's an update inside the person side of it. If you changed your name, that would be an Update. If you changed your address and perhaps got a new id, let's say you move jurisdictions, you move to another state, that would be a new address and then a new picture and a new number that would be updated. Now, you mentioned an expired id. So for a lot of cases, if you have an ID that's valid at the time of submission and that's a requirement, then it does expire after X amount of years. But nothing changes, no information changes on the ID other than you got a new one, the number is the same, the address is the same, the names, all that is the same. That is not at a required update to FinCEN.
- [36:52]
A
Okay, which that does help. But still, some people have some issues sometimes with identification too. A question that we commonly get is we have members that have asked if you will be offering bulk uploading of BoR reports. Is this an option that's being considered by you guys?
- [37:12]
D
It absolutely is. So we offer two ways for people to file directly to us. One is via the website you can file directly. Another is downloading a PDF from us where you can fill it out, attach documents, kind of email it around, and then send it to us. And then the third, third way is via our Application Programming interface. So an API. So you would ask to get API access to our database. We would vet you as an organization to make sure that you're a legitimate organization, et cetera. And then we provide you access so that you can collect beneficial ownership information in bulk and then submit it to us via API. And that would be sort of that bulk interface. We've approved several hundred companies already to do this. And if you would like, or if your organization would like to apply, go to fincen.govcontact in the subject. There's a dropdown for API requests, and that's where you would submit your request. You're going to either get a call or email back from us. We'll ask for a couple more bits of information so we can validate you and then you'll be provided access.
- [38:23]
A
So, Phil, when you talk about, you know, like the different ways of filing, we've recommended for people to go through that PDF option because that actually gives the person a documentation of, or a record that they can retain of what was submitted. Are there any other ways, like, does this API option offer that same type of documentation for all the bulk filings of what was submitted, or is it just more of a thank you for filing your boi?
- [38:54]
D
What the API provides is that if you're an entity that's filing many, many, many of these you can do it with a machine interface instead of clicking through and filling it online. So think of it as a very big tax provider. They have an API that sends all of that data to the iri.
- [39:18]
A
Okay.
- [39:19]
D
Similar idea for this. You collect beneficial ownership information and send it all to us.
- [39:26]
A
Okay. I do need to thank you for offering disaster relief for BOI like you did for. Like you have done in the past for fbar. And many of our members would have liked to have seen a broader scope of relief. What can you tell us about your process to determine how relief is offered? And I know this is new, and this was the first time it was offered.
- [39:48]
D
Exactly right. So, Melanie, and thank you for your leadership here and helping your societies with this request. We wanted to make sure that we were thoughtful and mindful about how we did this. We wanted to extend the appropriate level of relief. At the same time, we understand this is a new program, and we want to set a framework for new requests that come through regarding either hurricane relief or other natural disasters. Thinking about that, we wanted to tie it to what we've done been doing before and what the IRS and what FEMA has been doing as well, so that we have a repeatable process on this. We thought about that timeframe from the event and then with a certain amount of extended relief. And that's how we've been thinking about it, and we've been using that, and we'd like to use that moving forward. And so that's how we've been thinking about that.
- [40:51]
A
Okay, good. Thank you. So, any parting thoughts that you would like to share with our audience?
- [40:58]
D
Well, thank you. First off, I think what we would love to work with the CPA community more is to get better understanding from your perspective on how to help the business community understand their requirement, and also to see how we can work together to bring greater awareness to the business community. We understand the CPAs generally know what's coming down because you're tracking it, but how do we get the business owners to actually do the thing, whether it's helping them file directly or whether it's working with the CPAs or their legal professionals? Love to continue partnering with you there, but we'd love to see many more than 6 million by the time January 2nd comes around in terms of filings.
- [41:49]
A
And for sure, we would definitely want to be meeting with you further because I do know that some people have identified some concerns and issues as they take on new clients with that same question, like how can you verify if a client actually filed the BOI report? They're actually compliant. How can we work through that? And so I do think there are some. This is new, like we've said and we've repeated multiple times. So there are things to work through and we do appreciate being able to work through with you on this. So Phil, we really do appreciate your time and you're taking the time to answer questions and we hopefully can have you back again.
- [42:25]
D
Thank you. Love to. Anytime. Thank you all.
- [42:27]
A
Thank you, Phil.
- [42:33]
B
Well, Melanie, that was a fantastic discussion and I know now we're going to. Oh, we're going to hit the polls first. We've got a lot of questions to digest. A record number of BOI questions have come in. So Melanie, we've got these polls that we've put together that are going to help us just get a better understanding of how our town hall community is approaching bois. So we're going to bring the first slide up.
- [43:07]
A
Sure. So as we get this prepped up, I'm going to let people know that the first question is how are you or your firm supporting client needs around beneficial ownership information compliance requirements? And of course you have a couple of options and they are A we are just raising awareness on the requirements, B we are actively offering BOI compliance services, C we're planning to offer BOI compliance services soon, D we have no plans to offer by compliance services at this time and E, not applicable. Which of course we don't expect those in like business and industry to be offering BOI services.
- [43:53]
B
Yes. And Melanie, what we'll do here is we're going to tabulate all this information and we're going to then share it in the AICPA town hall newsletter and then most likely we'll be discussing it on the next town hall. So let's just give maybe another 10 seconds or so for them to provide this answer.
- [44:16]
A
And just to reiterate, Eric, the polls are important for us to be able to have that understanding so that we can best support our membership and how we can help us.
- [44:29]
B
Okay, I'm going to move to the second poll question.
- [44:33]
A
Okay. So the second poll asks, would you or your firm consider using a third party service or technology solution to streamline the process of delivering BOI compliance services to clients? And the options to answer this question are A yes, we are currently using a third party solution for BOI compliance B yes, we are actively exploring third party solutions for BOI compliance, C no, we prefer to handle by compliance in house D no, we don't plan to offer the service or E not applicable. So I think It'll be interesting to see these results, Eric.
- [45:26]
B
Yeah, I'm looking forward to it. And you just click the. You don't answer the question in the Q and A. You click on the screen there. Just the way you click the CPE checkers.
- [45:41]
A
Perfect.
- [45:44]
B
All right, well, we'll give them a couple more seconds here and then, Melanie, you're doing double duty here today.
- [45:50]
D
You're going to take us to the.
- [45:51]
B
Technical updates fun times.
- [45:55]
A
Okay.
- [45:56]
B
Okay. There you go.
- [45:58]
A
Perfect. Thank you. So, moving on, but we're still on BOI. FinCEN granted an additional six months for submitting the BOI reports to victims of Hurricane Milton, Helene, Debbie, Beryl and Francine. Now, the relief applies to those entities whose principal place of business is in the areas designated by FEMA. And FinCEN has said that they are willing to assist entities outside of the disaster areas that need access to access to records and that those Victims should contact FinCEN through their website. Now you please note that except those that were impacted by Hurricane Milton, the January 1 filing deadline for those companies created before 2024 are still in effect now. So January 1 is still the due date. And we are working with Vincen to offer a larger scope of relief for those that with the deadline of January 1st. And that was the piece of conversation you heard earlier. Also on this slide, you'll see a link to an article on the relief that FinCEN offered. And separately, we also have a recent webcast where practitioners shared their insights on their decisions to offer by services to their clients, including pulling in third party vendors. Kind of like what our poll just asked. And a rebroadcast will be available on December 4th. And also we heard your feedback and we've gone ahead and we've unlocked all the BUI resources to all AICPA members. So everything, if you're an AICPA member, you have access to everything for BoI. And on this next slide, we actually continue on the topic of disaster relief. And the IRS recently issued relief for flood victims in Juneau. And taxpayers now have until May 1st to file their extended 2023 tax returns and their 2024 returns that are due in March, all of them now due May 1st. And for your reference, I've also listed various deadlines for all the other disaster relief areas. There's a bunch, so please use this as a reference. And we also have a link to our Disaster Relief Resource center, which of course has a wealth of knowledge. And of course we've linked to our Benevolent Fund, which offers short term assistance to members that are victims of disasters and hopping on to the next slide. Mark gave an overview of the legislative landscape for 2025 and the Treasury Inspector General for Tax Administration, TIGTA, who evaluates IRS programs to identify vulnerable areas, also has an opinion as to how the IRS will do in 2025. And this year's report identified nine key areas of challenges that they believe the IRS will change. And some of them are just not a surprise giving the upcoming landscape. And so tax law changes. There's a lot of uncertainty and IRS struggles with that. So that is one of the areas, of course taxpayer services, which we've been talking about for years, is another area where TIGTAH is actually reviewing and assessing to see how they're able to move forward in this area. And of course complex compliance enforcement. You can see the list there of the things that we have. And moving on to the next slide, this is actually an important reminder to those that deal with digital assets. Now the IRS Revenue Procedure 2024-28 provides guidance on transitioning from the universal basis tracking for holders of digital assets and in to order order to meet that safe harbor, the deadline for determining that allocation is January 1st. So essentially this allows taxpayers to make sure that there aren't any assets without bases and no units of unused basis among the taxpayers digital assets accounts. So important safe harbor available to those who can use it January 1st. Now moving on, IRS did release the tax inflation so perfect the tax inflation adjustments for tax year 2025 and these items that are listed here are of interest to most taxpayers and I'm going to cover a few. But if you are interested, please take a look at the revenue procedure for most details. So things for example like the marginal rates for tax year 2025, the top tax rate remains at 37% for individual single taxpayers for certain income amounts and then of course for married filing joint it's for if you have income of 751,600. And they also cover the annual exclusion for gifts, which increases to 19,000 for calendar year 2025, which is an increase from 18,000 for 2024. This next slide we have a round robin of IRS updates. So to kick it off on November 30th at 11:59pm The IRS will pe begin the shutdown of e filing and payment options for filers of corporations, employment tax, estate and trusts, excise tax exempt organizations, individuals and partnership tax returns. So this is done every year around this time and it's so that the IRS can prepare their systems for the next upcoming filing season. But this in particular creates a hardships for those that have extended due dates from disaster relief since the they won't be able to e file their returns until the IRS reopens in January or they're going to have to paper file. The IRS is also encouraging people to sign up for an Identity Protection Personal Identification Number. So that's an IP PIN before November 23rd and the IP PIN is a six digit number that helps prevent fraud through the returns and identifies the actual correct one. So that will be available for any taxpayer that's interested in getting one and not just for victims of identity theft. And after November 23, the IP PIN system will undergo maintenance and will shut down similar to the E filing until January. Now the PTIN Renewal this is a reminder that the IRS is now in the process of preparing of renewing the Preparer Tax Identification Number, the ptin number for 2025 and all tax return preparers have to complete complete their ptin renewal by December 31st to avoid penalties. Now one thing too in combination with it is the written Information Security plan that's the WISP is required with a PTIN renewal. And though the term historically hasn't been included in Form W12, which is the form to get or to renew that PTIN or in the instructions, IRS actually updated both to explicitly reference the wisp. So please take a look at a resource hub for related information and tools on the WISP that ties in with the IP pim. And then finally on this last slide, for those of you who are in tax, just want to let you know that the 2024 engagement letters for various tax return engagements are now available for download. So with that I wrap up my technical items.
- [53:31]
B
Well thank you. Thank you Melanie. So just open forum the three of us. A tremendous number of questions have come in record attendance. I know we're going to, we're going to be increasing capacity apologize if a couple people got knocked off for a short portion. So let's just hop into some questions. First, one topic we haven't, I don't think we even covered in technical updates was another, you know, active topic here in the town halls and that's etc. ERTC and Melanie, so question here. You know when the bill came out, the Wyden bill back in January of this year, you know there was a talk about that date of I think it was the end of January where you had to have the filings done by obviously that bill never was passed. Where does that, you know, where does that stand to both you and Mark and just any, any Thoughts what the election results will have on ertc?
- [54:34]
A
Well, Mark can share on the election results on that one, how it will have, but I think there's still an appetite and a possibility. Mark?
- [54:42]
C
Yeah, I mean, so I think at the time the revenue raised by ending the ERTC program was like around $80 billion. There's still bipartisan concern about fraud. And that hasn't changed. It will 100% be dealt with. But I do not believe until we get into next year's tax debate and you know, the revenue that they can reap from that program as that time slips by also changes. So there again there's always this slim possibility because the bill did pass the House overwhelmingly that it could get snuck in a lame duck. It's just hard to see with this big tax debate coming next year.
- [55:21]
B
And Melanie, you know, off the top of your head, what is the actual final date anyway? It must be sometime in 2025. Right. They were giving.
- [55:27]
A
Well it depends. Right. Because of the rolling deadline. So April 15th moving of 2025 would be the last and final deadline for it. And of course there's the retroactive aspect and there's questions around that. And we've been pushing the IRS to try to give us more clarity and guidance.
- [55:43]
B
And just to be clear, you still what's our recommendation to firms where clients are asking them about applying?
- [55:51]
A
So it's just mainly to let clients know that there is a chance that retroactively it can be not accepted. But as of right now, the IRS system, you can still submit those claims, you can still move forward with them and it's just a matter of seeing how it works out. Now, the IRS isn't necessarily reviewing them right now and looking at them, but it just matter. It's a matter of time to see how it plays out.
- [56:17]
B
Okay, mark, with the BOI discussion, you know, likelihood of Trump repealing BOI, I mean one, a lot of if we got one request, we got 10 requests to delay it, Mark. To delay it. Why things work through the courts or just give people more time. So Melanie will give that to feedback to FinCEN. But that's one delay. Two, what the Trump administration potentially modifying or canceling.
- [56:46]
C
Yeah. So we're very noisy and so is the business community that's aware of this related to delay. It will heat up during lame duck. It's just whether that window of opportunity actually works out. And I hate to advise anybody to rely on Congress to do something, but it is definitely a possibility. I do have to say though that there is by this comes under Phil mentioned it, the Corporate Transparency act, which is money laundering, I mean terror financing. And so there is bipartisan interest in addressing these issues. There's also, though, widespread understanding on the Hill that businesses are not ready for this. So we're trying to leverage that to buy more time, eliminate it. I can't handicap that, but I think we do have a chance of postponement. It's just win.
- [57:37]
B
Well, Mark Melanie on that, I'm just going to go to the closing slides, but we're going to have a busy time as we march to year end in the start of 2025. So thanks for. Sorry, thanks for the overviews. So going on to these closing slides here, Digital cpa. We're all going to be there. It's going to be a great event. December 8th to the 11th, we'll actually be doing a live town hall from Digital cpa. So here's information on how you can join us. Resources Related to Small Firms We've got a number of different tools here related to leveraging building a small firm website, leveraging the CPA brand. We're going to have a product demonstration on November 27th and you can register for that via this link. We also have the Town hall rebroadcast so you can get CP for the rebroadcast and that you can get the information by clicking here for the for the next rebroadcast, which I think is occurring on Monday. So we're going to have a very full town hall on November 21st. Here's the lineup we'll be talking about, talking about the latest from what's happening in D.C. lisa Simpson will be back with us and we're going to have a special section talking about Audit Transformation with Emily Remington and Sarah Fishel, which you will not want to miss. So thanks for being with us this week. An exciting week, a lot going on, a lot of opportunity for you to play the trusted advisor role with your companies or your clients, and we will continue to bring you our best available information and insights as things evolve over the coming weeks. Thanks again for being with us today.
- [59:33]
A
Thank you for your participation. You can now subscribe to the AICPA.
- [59:38]
C
Town hall series on your favorite podcast.
- [59:41]
A
Platform, as well as watch archives on YouTube and AICPA TV.
- [59:46]
C
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