After receiving complaints that disregarded entities required to file Beneficial Ownership Information (BOI) Reports could not do so using their parent’s Employer Identification Number (EIN), the Financial Crimes Enforcement Network (FinCEN) has corrected the issue. Since Treasury Regulation Section 301.6109-1(h)(2)(i) took effect in 1997, the Internal Revenue Service (IRS) has permitted disregard entities, including single member limited liability companies to use the Employee Identification Number (EIN) of its owner (unless the disregarded entity has employees). Unfortunately, and without any regulatory authority, the Financial Crimes Enforcement Network (FinCEN) initially would not permit disregarded entities to use their owner’s EIN for purposes of beneficial ownership reporting.
This regulatory mismatch created filing complications because the FinCEN online Beneficial Ownership Information reports would only allow one filing per EIN. As a result, a disregarded entity using its parent’s EIN was not able to file its BOI report without first applying for an EIN from IRS. Disregarded entities meeting the Corporate Transparency Act’s “Reporting Company” definition were, in effect, no longer permitted to use their owner’s EIN. But on June 27, 2024, FinCEN corrected the error, allowing disregarded entities to use the parent’s EIN without receiving an error. Going forward, reporting companies may use the same EIN for multiple entities.
For further questions regarding the correction, please contact Liskow attorneys Leon Rittenberg III and Kevin Naccari, Jr. and visit our Corporate Transparency Act Resource page.
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