File Your BOI Blog | Are Tax-Exempt Organizations Required to File a Beneficial Ownership Information Report?

Understanding the Beneficial Ownership Information Reporting Requirements

The Corporate Transparency Act requires certain entities to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This beneficial ownership report is designed to enhance transparency and combat financial crimes like money laundering and tax evasion.

Tax-Exempt Organizations: Who Needs to File?

The answer isn't a simple yes or no. Some tax-exempt organizations must file a beneficial ownership information report, while others are exempt. Here's what you need to know:

Organizations That Are Exempt

Under the Corporate Transparency Act, certain tax-exempt entities are automatically exempt from filing a BOI report, including:

Organizations that qualify as tax-exempt under Section 501(c) of the Internal Revenue Code
Organizations that operate exclusively for religious, charitable, scientific, or educational purposes
Entities that have filed appropriate documentation with the IRS and received tax-exempt status
Organizations that meet specific requirements outlined in the CTA's exemptions

Organizations That Must File

Tax-exempt organizations may still need to file a FinCEN report if they:

Haven't yet received their official tax-exempt status from the IRS
Have for-profit subsidiaries or affiliated entities
Engage in substantial unrelated business activities
Don't fall under one of the 23 specific exemptions listed in the CTA

Steps for Determining Your Filing Requirement

Check Your Tax-Exempt Status
- Verify your current status with the IRS
- Ensure your tax-exempt determination letter is current
- Review any recent changes in your organization's structure or activities
Review Your Activities
- Assess whether you engage in any non-exempt activities
- Evaluate any for-profit ventures or subsidiaries
- Consider your organization's structure and ownership
Document Your Exemption
- Maintain records proving your exempt status
- Keep documentation of how you qualify for the exemption
- Prepare evidence in case of regulatory inquiry

Deadlines and Compliance

If your tax-exempt organization determines it needs to file a beneficial ownership report, be aware of these key deadlines:

Organizations created before January 1, 2024, must file by January 1, 2025
Organizations created during 2024 have 90 days from formation to file
Any changes to beneficial ownership information must be reported within 30 days

Common Questions and Misconceptions

Not necessarily. While many tax-exempt organizations are indeed exempt from filing beneficial ownership information reports, the exemption isn't automatic. Your organization must meet specific criteria under the Corporate Transparency Act.

Yes, until you receive official tax-exempt status from the IRS, your organization would likely need to file a BOI report with FinCEN.

Next Steps for Tax-Exempt Organizations

Evaluate Your Status
- Review your organization's current tax-exempt status
- Assess any non-exempt activities
- Consult with legal counsel if needed
Gather Required Information (if you determine you need to file)
- Identify your beneficial owners
- Collect necessary personal information
- Prepare company applicant details
Maintain Compliance
- Use FileYourBOI.com to track ownership changes
- Create reminders for filing deadlines
- Keep documentation of exempt status

Conclusion

Understanding your organization's obligations under the Corporate Transparency Act is crucial for maintaining compliance. While many tax-exempt organizations will be exempt from filing beneficial ownership information reports, each entity should carefully evaluate its status and activities to make the correct determination.

For specific guidance about your organization's filing requirements, consider consulting with a legal professional who specializes in nonprofit law and compliance. The consequences of non-compliance can be significant, so it's essential to get this right.