For you and I and everyone else on HN, the report is indeed trivial.
For many other small businesses, it is not.
There are millions of businesses which still operate largely on paper invoices and registers. Owners can't understand the text of the BOI website or the technical requirements, which includes registering for Login.gov.
Others are completely engrossed in their day to day operations and won't even hear about the dire warnings from an obscure federal agency. If they happen to check the Yahoo or Hotmail accounts they use for their business (often their personal communications too) they are just as likely to ignore it as spam.
That leaves it up to local accountants to fill the gap. Many don't know, or aren't keeping track of this because it's not a tax thing. When I asked my accountant about it she didn't answer for more than a month, and then sent out an explanation to all of her clients along with the following message:
If you want to engage us to prepare the BOI, our hourly rate is $250 will apply, with a one hour minimum. To minimize your fee, it is imperative for you to provide us with all the information required at once. Please contact our office if you wish us to prepare the BOI and we will send an engagement letter that will need to be signed and a list of documents we will need to prepare the BOI.
Ignoring the $500 per day fines and threat of prison time, can you see how dealing with this is a non-starter for a lot of small businesses?
Yeah, this is the first I've heard of ownership information needing to be filed--but I don't have any LLCs to file for, anyway.
Reading what the AG said about it he seems to feel it's a major intrusion for the government to require identifying the owners. I think that's what this is about--exposing the shell corporations. And of course the people who are keeping dirty books won't like that.
Many jurisdictions like the UAE and Singapore also demand Beneficiary Ownership reports, but obviously that does nothing to prevent the countries from being used for shell corporations. Not to mention, you can get away with it by simply reporting your source of funds as a gift from a rando, complete with a fake letter that no one will bother going in detail to verify.
> There are millions of businesses which still operate largely on paper invoices and registers
It was a really easy report to file. It was mostly about the ownership structure. A lot of scare tactics out there to make money, but filing it was just a few clicks and I had to get some info from my co-founder.
I don't remember, but there's only like at most 10 screens and each is relatively short.
Tell it to my 70 year old stone mason who doesn't have a computer, uses his phone only for making calls, only issues paper invoices and estimates, and only takes paper checks.
Or the local restaurant owner from Guatemala in the nearest town who only takes cash, and has no mechanism for orders other than pointing at the menu or picking up the phone.
A fact that seems to be lost on many tech people in coastal cities is technology literacy is limited. A 2016 OECD skills survey laid out the problem with very deep data across developed countries:
you are 100% right... but "70 year old stone mason who doesn't have a computer" has to file taxes with the IRS. also "Or the local restaurant owner from Guatemala in the nearest town who only takes cash" also needs to file taxes with the IRS. this is as important of a thing as your Apr 15th deadline to file your returns. so this "low tech / no tech" really is a cop-out - if you are a business owner you have responsibilities or you'll get closed up or punished (or both) if you do not comply
Do you know what the BFOI requires? I just filled one out this morning.
It's literally just the names and govID numbers of the beneficial owners. All the info you need is a picture of the driver's license for each owner. That's it. Not a single figure. No percentage of ownership or shares etc. Requires absolutely zero accounting.
Also, the website requires no login, lessening the burden. (Actually for a gov website I thought it was pretty well designed, with clear help/explanations, etc.)
Many accountants are worried about the risk of filing for their clients and won’t do it at all. Determination of ownership is not as straightforward as one might assume in many cases.
My accountant just told me yesterday that AICP is telling their accountants to just have their clients do it themselves cuz of liability reasons in ownership not being as straightforward in many situations, like you said.
Or it may be straightforward (the people in control know they're in control) but not reflected in the books as it's not an accounting issue, and therefore the accountant doesn't really know (and doesn't want to assume wrong).
You are exactly correct. I'm seeing this already as a relative of mine is exactly that, a small local accountant. He's struggling to inform the many small businesses that he supports. Most can barely use a computer, believe it or not. Some don't have smart phones. He's referring them to a service that is charging a couple of hundred bucks to do the filing.
I also run a small business, I had never heard of this. No one reached out to me, I was not notified in any way. For something that can threaten my freedom, it's a real shocker, the only way I heard about this is because this guy told me. Oh yeah, I also got some random text messages that seemed like spam, probably from one of these parasites trying to charge $300 to fill out a form.
For many other small businesses, it is not.
There are millions of businesses which still operate largely on paper invoices and registers. Owners can't understand the text of the BOI website or the technical requirements, which includes registering for Login.gov.
Others are completely engrossed in their day to day operations and won't even hear about the dire warnings from an obscure federal agency. If they happen to check the Yahoo or Hotmail accounts they use for their business (often their personal communications too) they are just as likely to ignore it as spam.
That leaves it up to local accountants to fill the gap. Many don't know, or aren't keeping track of this because it's not a tax thing. When I asked my accountant about it she didn't answer for more than a month, and then sent out an explanation to all of her clients along with the following message:
If you want to engage us to prepare the BOI, our hourly rate is $250 will apply, with a one hour minimum. To minimize your fee, it is imperative for you to provide us with all the information required at once. Please contact our office if you wish us to prepare the BOI and we will send an engagement letter that will need to be signed and a list of documents we will need to prepare the BOI.
Ignoring the $500 per day fines and threat of prison time, can you see how dealing with this is a non-starter for a lot of small businesses?