What is the Corporate Transparency Act (CTA) and how does it affect LLC Beneficial Ownership reporting requirements?

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Customers who bought a checkbook IRA from Rocket Dollar before January 1st, 2024, have a Colorado LLC inside of their checkbook IRA. Checkbook IRAs with Trusts are not subject to the same reporting requirements.

The Corporate Transparency Act of 2019 was enacted as a result of the Anti-Money Laundering Act of 2020, designed to counter money laundering, crime, corruption, and lawyering of entities where a corporation could hide its beneficial owners.

FinCEN, the Financial Crimes Enforcement Network, is the government body to which beneficial ownership information must be reported. 

All Rocket Dollar customers will have to register their Colorado LLCs (or other LLCs they may have created on their own). Trusts have an exemption from these reporting requirements.

What do I have to do for my Colorado LLC?

LLC Managers must file on behalf of their IRA LLC. All LLCs created prior to 1/1/2024 will have until 1/1/2025 to file the BOI reporting. Rocket Dollar will NOT complete this filing, and it must be filed by the Individual IRA holder. You will file by completing a Beneficial Ownership Information Report (BOIR) through this link to FinCEN’s BOI Filing System (Beneficial Ownership Information).

"A domestic reporting company created before January 1, 2024, must file its initial BOI report not later than January 1, 2025." "A final rule implementing the beneficial ownership information reporting requirements of the Corporate Transparency Act (CTA) was issued in September 2022. These regulations go into effect on January 1, 2024. Beneficial ownership information will not be accepted prior to January 1, 2024."

 

How long do I have to do this?

You have until January 1st, 2025. It is strongly recommended to do the report ASAP to get it completed. Rocket Dollar is always very busy at the turn of the year and will prioritize other questions of clients during times of high end-of-year volume.

What is a “Beneficial Owner?”

A beneficial owner is a person who enjoys the benefits of ownership even though the title to some form of property is in another name. It also means any individual or group of individuals who, either directly or indirectly, has the power to vote or influence the transaction decisions regarding a specific security.

A beneficial owner is a person who enjoys the benefits of ownership though the property's title is in another name.  Beneficial ownership is distinguished from legal ownership, though in most cases, the legal and beneficial owners are one and the same.

Are there exemptions that I could use to avoid filing this report?

Unfortunately, no. FinCEN lists 23 exemptions, including one that mentions tax-exempt entities. On a close read of the FinCEN guidelines, tax-exempt entities refer to 501(c)(3)s. 

You can see their checklist below. IRA LLC managers would not appear to be exempt, and a Colorado LLC would not appear to be exempt. If you refuse to file a report, you are liable for possible civil penalties:

  • $500 per day.
  • $10,000 fine for reporting false or inaccurate information.
  • 2-year prison sentence.

FinCEN’s “Tax Exempt Entities Exemptions” Checklist Instructions

Instructions for Filing

  1. Go to this link, the electronic filing section. https://boiefiling.FinCEN.gov/boir/html If you wish to file by Adobe Reader and PDF, you must generate your own instructions. 
  2. Login to App.rocketdollar.com > PROFILE> Documents > USER DOCUMENTS> Download your documents to reference in the upcoming questions.
    1. IRA LLC Articles of Organization
    2. EIN Letter
    3. Operating Agreement
  3. YES to a FinCEN ID, to assist with modifications or referring to the filing in the future.
  4. Ignore, do NOT check Foreign Pooled Investment Vehicle.
  5. List the name of your LLC on your articles of organization.
  6. List any DBA if you have changed the name of your LLC (unlikely for Rocket Dollar customers).
  7. EIN
  8. Refer to your EIN letter document. DO NOT LIST YOUR SOCIAL SECURITY NUMBER HERE.
  9. Ignore and skip, this is only for foreign tax IDs.
  10. United States of America
    1. State of Formation - Colorado
    2. SKIP - Tribal Jurisdiction of Formation
    3. SKIP
  11. Current Address - where you live. Rocket Dollar does not provide another address.
  12. City
  13. United States of America.
  14. Your Home State.
  15. Your Zip Code.
  16. Existing Reporting Company - If your LLC was created before Jan 1, 2024, you should check this box. It is likely that this will apply to almost all Rocket Dollar customers that have a Colorado LLC.
  17. SKIP
  18. FinCEN ID - provide if you already  have a FinCEN ID. If a FinCEN ID for the company applicant is not provided, information about the company applicant must be provided in fields 19 through 33.
  19. Last Name of whoever is filling out this online report. This will probably be you, the client, but could be a financial advisor, assistant etc. 
  20. Your First Name.
  21. Your Middle Name.
  22. Your Suffix if your name has one (for example Jr, Sr, I, II, IV,)
  23. Your Date of Birth
  24. Address Type - Residential Address (You address)
  25. Your Residential Address
  26. Your City
  27. Your Country/Jurisdiction
  28. Your State.
  29. Your Zip Code.
  30. Your Chosen Identify Document to Provide (drivers license or passport, your choice)
  31. Drivers License Number or Passport Number
  32. Identifying document issuing jurisdiction - fill out as it applies to your identity document.
  33. Provide a picture of your ID by uploading it to the portal
  34. SKIP
  35. Only check this if you are a parent filling out this for a child with a checkbook IRA with Colorado LLC.
  36. This is a FinCEN ID just for the client, the Beneficial Owner of the account.
  37. As Described earlier, you do not have an exempt entity through a Rocket Dollar Coloardo LLC.
  38. Last Name: Must be the client’s and IRA holder’s last name. Not allowed to put a financial advisor or another persons name other than the client. The IRA holder is always the beneficial owner of the LLC.
  39. Your First Name.
  40. Your Middle Name.
  41. Your Suffix if your name has one (for example Jr, Sr, I, II, IV,)
  42. Your Date of Birth.
  43. Your Address. 
  44. Your City. 
  45. Your County/Jurisdiction
  46. Your State. 
  47. Your Zip Code.
  48. Your Chosen Identify Document to Provide (drivers license or passport, your choice).
    1. Identifying Document Number
    2. Jurisdiction of your Identity Document (typically the United States)
  49. Identity Document Number
  50. State of Identity Document
  51. Upload a Picture of your identity Document.

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