BOI Reporting Dead for Most Entities (At Least, for the Foreseeable Future)

Posted on March 3, 2025 by Russ

Last night, President Trump and the Treasury Department each posted regarding the Corporate Transparency Act (which required Beneficial Ownership Information (BOI) reporting).  I happened to see President Trump’s announcement first (on Truth Social), quoted by Carol Roth on Twitter:

The Department of the Treasury release (a series of Twitter/X posts) states:

The one group of business owners who may still need to file BOI reports are entities with foreign owners. It’s unclear today if BOI reports will be required if there’s any foreign ownership or if an entity must be majority-foreign owned. If your entity falls into this category, you should pay attention to the new rules when announced.

But there is one minor fly in the ointment: Can the Department of the Treasury simply ignore the plain language of the law which requires reporting? That question immediately came to mind, and a fellow EA (Matt Metras) asked it in the comments to the Treasury tweets. It’s hard for me to envision Democrats challenging this: Let’s force small businesses to comply with a regulation that adds costs and we’ll make small business owners dislike us even more. (I also think that this will be formally done by a new regulation, or perhaps we should say “anti-regulation.”)

In any case, if you held off filing your BOI report it appears you’ve won: BOI reporting is dead for most.

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BOI Reporting Again Voluntary

Posted on February 28, 2025 by Russ

Last night, FinCEN issued a press release which made Beneficial Ownership Information (BOI) reporting voluntary (for now).

Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.

No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.

I anticipate an income and/or asset threshold above which BOI reporting will be mandatory (and below which it will be voluntary).  I also would not be surprised if entities with majority foreign ownership will be required to file BOI reports.  Almost certainly, most small businesses will likely be exempt from BOI filing.

I’ll update this in March when the new rules come out.

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California’s FTB Issued Incorrect 1099-G’s

Posted on February 20, 2025 by Russ

This afternoon, California’s Franchise Tax Board (FTB, the state income tax agency) announced that taxpayers may have received incorrect 2024 Form 1099-G’s.

The Form 1099-Gs sent by FTB for tax year 2024 may contain incorrect amounts when an estimate transfer from the previous year has occurred. [Taxpayers and] Tax professionals should verify that the amounts reported on the Form 1099-Gs are correct by comparing the amounts with the previous year tax return.

The FTB will be sending corrected 1099-G’s.  For now, taxpayers should review the 1099-G’s carefully and use the correct amount of the tax refund, not what is on the 1099-G.  Tax refunds can (but are not necessarily) taxable income the following  year for federal income tax if the taxpayer itemized in the previous year and deducted income taxes (not sales tax).

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If You’re Asking for Bail, Don’t Hide Your Cryptocurrency Accounts

Posted on February 11, 2025 by Russ

The saga of poker playing Supreme Court litigator (and, for the attorneys who read this, SCOTUSblog founder) Tom Goldstein continues.  Mr. Goldstein was arrested late yesterday, and will be spending his time (at least for a while) at ClubFed while he awaits trial on 22 counts of tax fraud related to allegedly not claiming his poker winnings on his tax returns while taking poker losses as a business expense.

Mr. Goldstein is alleged to have moved millions of dollars in cryptocurrency (after supposedly having a negative net worth) from wallets he didn’t disclose (at the time of requesting bail).  (Mr. Goldstein denies these allegations.)  Separately, he’s allegedly attempting to prevent a potential witness from assisting in the investigation (another “Don’t try this yourself”–if true).

US Magistrate Judge Timothy Sullivan ordered Goldstein to be detained, noting:

I find…that there is clear and convincing evidence of a violation of pretrial release conditions (not telling Pretrial about two cryptocurrency wallets and transferring funds without prior Pretrial approval) and that Mr. Goldstein has violated his release conditions. Furthermore, there are no conditions and/or combination of conditions that can be established to reasonably assure compliance given the seriousness of the violations and the Court’s continued concern of risk of flight.  Mr. Goldstein is unable and/or unlikely to abide by any [conditions of release] at this time.

Ouch. But assuming the allegations (of breaking the previous conditions of release) are true, Mr. Goldstein has only himself to blame.  Not disclosing material information when you know you’re being scrutinized is not a good idea.

I don’t know if the Goldstein case will rise to the level of Wesley Snipes saga of over a decade ago, but it’s looking that way today.

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20 Years Ago Today…

Posted on February 9, 2025 by Russ

…I started this blog.  I was a resident of Irvine, California back then.  It’s been an interesting 20 years.

I have no idea what the next 20 years will bring.  If you told me in 2005 that within 20 years I would see:

  • Donald Trump elected to two non-consecutive terms as President of the United States;
  • I would be residing in Las Vegas, Nevada;
  • Our office would expand 500%;
  • The IRS would have the same issues with correspondence in 2025 as they did in 2005; and
  • I would still be happy with what I’m doing as a career.

…I would likely have thought you insane.

I cannot tell you if I’ll continue this blog for the next 20 years.  As I tell all clients, I don’t have a working crystal ball.  (If I did, I’d make one bet a day at one of our local casinos.  I’m not that greedy.)  But I do hope to continue it for the foreseeable future.  Here’s a link to my first post (about myself) and the second post (why I started this blog).

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How Many Months Are There in a Year?

Posted on February 5, 2025 by Russ

When you were a child you learned that a minute has 60 seconds, an hour has 60 minutes, a day has 24 hours, a month has 28 to 31 days, and that there are 12 months in a year.  Believe it or not, a client of ours is still dealing with an issue related to the IRS thinking his return was mailed in the 15th month of the year.

I wrote about this case (in brief) last year.  Here’s what I wrote about his issue last year:

Client #3 received a notice alleging his return was untimely filed. His return was required to be mailed; he was outside the United States and sent it with tracking from New Zealand (timely). It wasn’t received timely (but that’s the fault of the Postal Service, not my client) and doesn’t impact him; there’s a rule in tax called the Postmark Rule which governs this situation. My client has now received a letter from IRS Collections even though we disputed the entire issue months ago.

What I didn’t say is that his receipt from the New Zealand postal service shows his return was mailed on November 15th (but shown on the receipt as 15/11/2022; most of the world puts the day before the month on receipts).  My client had requested (and was granted) a second extension until December 15, 2022 to mail his return.  It didn’t get to Austin, Texas until 2023, but there’s a rule covering that: the Postmark rule.  When you mail something using the US postal service using certified (or registered) mail, that postmark is considered the date of filing.  That’s law; it’s Internal Revenue Code § 7502(a)(1).

But my client’s return was mailed from New Zealand.  Well, he’s covered, too; there’s a regulation covering this situation.  It’s 26 CFR § 301.7502-1 (c)(B)(1), which reads:

In general. If the postmark on the envelope is made other than by the U.S. Postal Service—

(i) The postmark so made must bear a legible date on or before the last date, or the last day of the period, prescribed for filing the document or making the payment….

The IRS is alleging my client mailed this in 2023; however, we have a picture of the envelope and the receipt (both show mailing on November 15, 2022).

We attempted to get the penalty for late filing reversed at the notice stage, but the IRS refused.  We filed an appeal in July 2024.  Appeals just wrote back (sent to us in late January 2025) telling us that the IRS did not follow its internal procedures in sending the case to Appeals; it’s been sent back by Appeals to the IRS to rectify the errors.

Meanwhile, my client remains in limbo.  Eventually, someone at the IRS will realize that we’re no longer in 46 B.C. (a year with 15 months!), and the Julian calendar introduced then has exactly twelve months (and we’ve used 12 months since then).

In 45 B.C. Julius Caesar introduced the Julian calendar.  But apparently there had been too many omitted leap months in the past, so 46 B.C. had 15 months (and 445 days).

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BOI Reporting: It’s Back (soon?)!

Posted on January 23, 2025 by Russ

The US Supreme Court removed the stay that the 5th Circuit Court of Appeals had removed (after putting it on) that stayed enforcement of the Corporate Transparency Act that required Beneficial Ownership Information reporting. This means that if you have not yet filed your Beneficial Ownership Information (BOI) report you must do so likely will soon need to.  I suspect that FinCEN will give entities a couple of weeks to comply.

What does this mean? If you have not already filed your BOI report, you must do so now!  should prepare to do so.  You can find more information on BOI reporting at FinCEN’s web page on BOI reporting.

I will update this post with the actual FinCEN deadline for filing (once it’s announced).

I received an email regarding a second nationwide stay on BOI reporting.  Even though the Supreme Court released the stay in McHenry v Texas Top Cop Shop, a second nationwide stay remains in place in a case called Smith v Department of the Treasury.  However, it’s clear that if the US government appeals that stay (to the 5th Circuit), that the stay will be removed.  Of course, we now have the Trump Administration, and it’s unclear what their stand is on BOI reporting.

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Supreme Court Litigator, High-Stakes Poker Player, and Tax Felon?

Posted on January 17, 2025 by Russ

This morning, a friend texted me, “Russ, you MUST read this!” with a link to this story about Supreme Court litigator Tom Goldstein.  Mr. Goldstein was indicted on numerous tax-related charged regarding how he handled his high-stakes poker playing.

Mr. Goldstein is well known in the legal community as an appellate attorney who has argued numerous cases in front of the Supreme Court.  He was successful, and one of his hobbies was playing poker.  Not just the typical games played in a casino; he played really, really high-stakes games for millions of dollars.  He spent the requisite time studying, and he appears to have been an overall winning player.

In reading through the 22-count, 50-page indictment, one can see he played in very high-stakes games in Macau, Beverly Hills, and elsewhere; he had wins and losses of $10 million or more.  But the Department of Justice alleges that when he won those winnings they didn’t find there way to his tax returns, and his losses were sometimes paid out of his firm as business expenses.  Adding in alleged lies to mortgage companies and then not paying his taxes, there are big problems facing Mr. Goldstein.  Of course, these are just allegations today.

The indictment is quite readable and, in fact, reads far more like a plot of a novel.  A very successful attorney allegedly engages in sinful behavior, cheats the government, womanizes, and gets caught.  A helpful hint to anyone who is prominent: Just pay those taxes!  Mr. Goldstein, who certainly knows a lot about the law, allegedly forgot that lesson.

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IRS Extends California Fire Disaster Area Deadlines Until October 15th

Posted on January 10, 2025 by Russ

The IRS announced this afternoon that taxpayers in Los Angeles County impacted by the current wildfires have all tax deadlines extended until October 15th. This includes:

  • Individual and C-Corporation Tax Returns (and payments of tax) due on April 15th;
  • Partnership and S-Corporation Tax Returns (and payments of tax) due on March 17th;
  • Estate and Trust Tax Returns due (and payments of tax) on April 15th;
  • Tax-exempt Organization Returns due on May 15th;
  • First, second, and third quarter Estimated Tax Payments due on April 15th, June 16th, and September 15th; and
  • Payroll and excise tax returns due on January 31st, April 30th, and July 31st.

This extension is automatic. It’s possible this will also be extended to taxpayers in Ventura County (the “Kenneth Fire” is burning in that county).  UPDATE: Luckily, the Kenneth Fire appears to be 100% contained with minimal damage.

California’s Franchise Tax Board will conform to this extended deadline (California law mandates this).  UPDATE: Governor Newsom announced the extension on Sunday.

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Personal Tax Return Filings to Begin on January 27th

Posted on January 10, 2025 by Russ

The IRS announced today that, as expected, efiling of tax returns will begin on Monday, January 27th.  Individual tax returns are due on Tuesday, April 15th.

We strongly advise efiling your tax returns (if possible), and we also strongly advise you obtain an IP PIN (an IRS Identity Protection PIN) if you have not already done so.  You can obtain one on the IRS website.  Do note that you must have an account on IRS.gov in order to obtain an IP PIN (an IRS online account requires you to use id.me).  An IP PIN prevents anyone without that PIN from efiling a return with your social security number.

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