Summary: As discussed in detail below, the Corporate Transparency Act (CTA) provides an exemption to its reporting requirements for certain large operating companies (the Large Operating Company Exemption or “LOC Exemption”). In order to qualify for the LOC Exemption, a reporting company must, among other requirements, “have filed a Federal income tax or information return in the United States in the previous year demonstrating more than $5,000,000 in gross receipts or sales.” Certain reporting companies are “disregarded entities” (DREs) for Federal tax purposes and, as such, do not themselves directly have a Federal tax filing obligation or ability. However, based upon guidance from FinCEN and the IRS, support exists for the proposition that the Federal tax filing of a DRE’s sole individual owner

The Financial Crimes Enforcement Network (FinCEN) recently updated its Frequently Asked Questions (FAQs) regarding the Beneficial Ownership Information (BOI) Reporting Rule.  The October 3, 2024 FAQ updates provided crucial clarifications on several aspects of the FinCEN rules. This summary highlights certain of the new and updated FAQs that we think will most greatly impact parties as they assess their filing obligations. Access to Information (A.3 and A.6) In updated FAQ A.3, FinCEN clarifies who may access filed information, including: federal governmental agencies engaged in national security, intelligence or law enforcement; officials at the Department of the Treasury; state, local and tribal law enforcement agencies with court authorization; foreign law enforcement and other parties by request through a U.S. federal agency for authorized activities related to national