Category: Featured

In the realm of accounting firms, Bowman & Company CPA firm stands out for its workplace culture, earning back-to-back recognition from Accounting Today for being one of the top 50 midsize Best Firms to work for in 2022 and 2023. What distinguishes Bowman & Company is not just its expertise in financial management but its commitment to creating an environment where employees can thrive and feel appreciated. Collaboration is deeply ingrained in the firm’s culture, from partners to associates, fostering teamwork and camaraderie among staff. Bowman & Company also prioritizes employee development, offering training programs, mentorship, and opportunities for growth. Work-life balance is emphasized through flexible arrangements, allowing employees to excel professionally while maintaining personal well-being. Diversity and inclusion are core values, ensuring that every voice is heard and respected. Recognized by Accounting Today, Bowman & Company CPA firm stands as a testament to excellence in both accounting services and workplace culture.

Initial ERC Claim Disallowance Letters Issued

The IRS has taken a proactive stance by sending out disallowance letters to more than 20,000 businesses. These letters target claims made by businesses that either did not exist or lacked paid employees during the eligibility period (March 13, 2020, to December 31, 2021). This preemptive measure aims to identify ineligible claims before they are paid.

Dubious TV Promotions and Claim Withdrawal Process

A prior warning was issued on September 29th, cautioning business owners against aggressive TV marketing related to ERC claims. Subsequently, a November 9th article outlined a procedure for those who made ineligible claims to withdraw them and avoid potential issues with the IRS. The disallowance letters play a crucial role in preventing incorrect refunds from going to ERC promoters.

How These Letters Help Taxpayers

The disallowance letters serve a dual purpose:

  1. Help ineligible taxpayers avoid audits, repayment, penalties, and interest.
  2. Protect taxpayers by preventing incorrect refunds from reaching ERC promoters.

Enforcement Activities and Future Plans

These disallowance letters are part of the IRS’s broader enforcement activities, with plans for additional letters in the future. The IRS continues to caution taxpayers against aggressive maneuvers by marketers and scammers in the ERC space. However, those engaged in fraudulent activities may face potential criminal investigation and prosecution.

New Voluntary Disclosure Program

Additionally, the IRS launched a new Voluntary Disclosure Program on December 21st, 2023. The new disclosure program allows taxpayers who received ERC but did not qualify to repay only 80% of the credit they received without interest or penalties. Taxpayers must apply by March 22, 2024 to enter the program. To qualify for this program, the taxpayer must provide the IRS with names, addresses, and telephone numbers for the advisors who assisted with the ERC claims. If a taxpayer is unable to repay the 80% of the credit, they may be able to apply for an installment agreement however the taxpayer would be required to pay penalties and interest under the installment agreement.

In the ever-evolving landscape of business regulations, the Corporate Transparency Act (CTA), passed as part of the National Defense Authorization Act for Fiscal Year 2021, introduces new reporting requirements for businesses in the United States, specifically focusing on beneficial ownership.

The CTA aims to combat illicit activities such as money laundering, tax fraud, and terrorism financing by increasing transparency in the ownership structures of companies. It requires corporations, limited liability companies (LLCs), and similar entities to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

What Is FinCEN? – The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the Treasury. Established in 1990, FinCEN’s primary role is to safeguard the financial system from illicit use, combat money laundering, and promote national security through the collection, analysis, and dissemination of financial intelligence.

FinCEN works closely with law enforcement agencies, intelligence agencies, financial institutions, and regulatory entities. It implements and enforces compliance with certain parts of the Bank Secrecy Act, including the requirement for financial institutions to report suspicious activities that might signify money laundering, tax evasion, or other financial crimes.

FinCEN also plays a crucial role in fighting terrorism by tracking and cutting off sources of funding for terrorist activities. It achieves this by analyzing financial transactions and sharing this information with domestic and international partners.

Companies Required to Report Beneficial Ownership Information (BOI) to FinCEN

There are two types of reporting companies:
Domestic reporting companies – corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States. This includes single member LLCs.
Foreign reporting companies – entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

There are 23 types of entities that are exempt from the reporting requirements. See FinCEN Q&A C.2. Carefully review the qualifying criteria before concluding that your company is exempt.

Who is a Beneficial Owner – A beneficial owner, as defined by the CTA, is an individual who exercises substantial control over a company or owns or controls at least 25% of the ownership interests of that company. There can be multiple beneficial owners for a single company. The CTA excludes certain entities from this requirement, such as publicly traded companies, banks, credit unions, and certain regulated entities, among others.

The information to be reported includes each beneficial owner’s full legal name, date of birth, current residential or business street address, and a unique identifying number from an acceptable identification document, such as a passport or driver’s license. This information must be updated within a year of any change in beneficial ownership.
Non-compliance with the CTA can result in hefty fines and potential imprisonment. Therefore, it is crucial for businesses to understand their obligations under this new law and take the necessary steps to comply.

The CTA represents a significant shift in U.S. corporate law, and its impact will be far-reaching. While it aims to enhance corporate transparency and combat illicit activities, it also imposes new administrative burdens on small and medium-sized businesses.

Companies will need to devote resources to identify their beneficial owners, collect the required information, and report it to FinCEN. They will also need to ensure that this information is kept up to date, which could require ongoing monitoring and reporting efforts.

Moreover, the CTA raises privacy concerns. Although FinCEN is required to keep the reported information confidential, it can be disclosed in certain circumstances, such as in response to a request from law enforcement agencies.

Filing Due Dates

Existing Businesses -If your company already exists as of January 1, 2024, it must file its initial BOI report by January 1, 2025, which provides plenty of time to comply. But it is best not to procrastinate and risk penalties for not complying.

New Businesses – For a U.S. business newly created on or after January 1, 2024 and before January 1, 2025, as well as a foreign entity that becomes a foreign reporting company in that time frame, the BOI report is due 90 calendar days from the earlier of the date on which the business receives actual notice that its creation has become effective or the date on which a secretary of state or similar office first provides public notice that the company has been created or registered. The reporting deadline is reduced to 30 days for both U.S. and foreign entities created or registered on or after January 1, 2025.

In addition to information about the company and beneficial owners, these businesses must also report information about the “company applicant,” defined as(1)the individual who directly files the document that creates, or first registers, the reporting company and (2) the individual that is primarily responsible for directing or controlling the filing of the relevant document.

Penalties – If a person has reason to believe that a report filed with FinCEN contains inaccurate information and voluntarily submits a report correcting the information within 90 days of the deadline for the original report, then the CTA creates a safe harbor from penalty. However, should a person willfully fail to report complete or updated beneficial ownership information to FinCEN as required under the Reporting Rule, FinCEN will determine the appropriate enforcement response in consideration of its published enforcement factors. The willful failure to report complete or updated beneficial ownership information to FinCEN, or the willful provision of or attempt to provide false or fraudulent beneficial ownership information may result in civil penalties of up to $500 for each day that the violation continues, or criminal penalties including imprisonment for up to two years and/or a fine of up to $10,000. Senior officers of an entity that fails to file a required BOI report may be held accountable for that failure. So, this reporting requirement should not be taken lightly.

Updates – When the information an individual or reporting company reported to FinCEN changes, or when the individual or reporting company discovers that reported information is inaccurate, the individual or reporting company must update or correct the reported information, as applicable.

FinCEN Small Entity Compliance Guide – This 50-page guide includes interactive flowcharts, checklists, and other aids to help determine whether a company needs to file a BOI report with FinCEN, and if so, how to comply with the reporting requirements. This Guide will be updated periodically with new or revised information.

How Does a Company File a BOI Report? If your company is required to file a BOI report, you must do so electronically through FinCEN’s online secure filing system.

FinCEN will publish instructions and other technical guidance on how to complete the BOI report form.

Navigating the complexities of the CTA and its reporting requirements can be challenging. If you need assistance, contact your legal counsel.

The Corporate Transparency Act (CTA), which was enacted by Congress in 2021 as part of the Anti-Money Laundering Act of 2020, will establish a national database of Beneficial Ownership Information (BOI) to crack down on financial crimes such as money laundering, terrorist financing, or concealment of assets in the US through shell companies. Starting January 1, 2024, the majority of US small businesses, including any existing, amended, or new corporation, Limited Liability Company, will be subject to new reporting requirements under the CTA and must submit beneficial ownership information with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) on their portal.

The act’s impact is sweeping and will affect nearly every US small business. Compliance will require reporting from any individual who is a “beneficial owner” (anyone having at least 25% ownership or control of the entity) or has “substantial control” of a company. There are many ways by which someone may fall into the category of beneficial owner and, therefore, be required to report. To prepare, companies should begin developing procedures to identify beneficial owners and track any changes in ownership to ensure compliance with reporting requirements.

Who is Required to File BOI Report?

Under the new reporting requirements, any domestic or foreign entity filing with a secretary of state must submit a beneficial ownership report in the FinCEN portal. This includes any corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state.

To comply with new requirements, reporting companies will need to identify themselves and anyone who is considered a”beneficial owner” (those having at least 25% ownership or control of the entity) or has substantial control of a company. Those with substantial control include, but may not be limited to:

  • Senior officers
  • Anyone with authority to appoint or remove any senior officers or a majority of the board of directors
  • Any individual with influence on important decisions made by the reporting company
  • Anyone with any form of substantial control over the reporting company, for example, a trustee of a trust

Once a reporting company has identified its beneficial owners, they must report the following information about each: name, birthdate, address, and a unique identifying number and issuing jurisdiction from an acceptable identification document (such as a state-issued ID or passport) along with an image of the document.

Timing of New Reporting Requirements

The rule will go into force on January 1, 2024. Under FinCEN’s recently proposed amendment to the reporting rule, companies founded or registered after January 1, 2024 will have 90 days after obtaining notice of their creation or registration to file their initial reports. Companies created or registered before January 1, 2024, will have one year (until January 1, 2025) to do so. After their initial filing, companies will have 30 days to report any changes to the information and must correct inaccurate information in previously filed reports within 30 days if they become aware of any inaccurate information in previous filings.

Reports will be submitted in FinCEN’s forthcoming portal, and there will be a fee of approximately $85 to submit an initial BOI report.

Penalties for Violating Reporting Requirements

Companies failing to report required or found to be providing false beneficial ownership information will be subject to harsh penalties, including civil penalties of up to $500 per day that a violation continues, fines of up to $10,000, and imprisonment for a period of up to two years.

To avoid these consequences, companies should prepare proactively by determining who qualifies for these disclosures and compiling information now. This process may be lengthy and complex. Please reach out to your advisors at Bowman & Company for more information or with any questions about how the CTA may affect you and your organization.


Bowman & Company is happy to announce the promotions of Robert Miller, CPA, Monica Sautter, Maribel Galan, CPA, and Shannon Sandoval. These four professionals will take on new their new roles as Senior Supervisors.  

Robert is a valued member of the tax team, working remotely from Colorado. He says one of his best experiences at Bowman was traveling to Stockton to meet his colleagues in person and tour the facility. His biggest professional challenge was moving to a new state with his wife and young children during tax season. In his new role, Robert is looking forward to expanding his knowledge with clients and being a mentor to newer staff.  His motto is “Hard Work Pays Off.” 

Monica specializes in tax services and is known as the 990 Queen. Having spent a part of her working history as a career mom, she greatly appreciates how flexible the Firm was in supporting her work-life balance and has fond memories of company social events and celebrations. Her family motto is “Leave it better than you found it.”  As a Senior Supervisor, she is looking forward to continuing to grow in her skills while helping others to succeed in their careers.   

Maribel began her career working in audit before moving into the tax department, a transition she considers one of her top experiences at Bowman due to the resources available and the support that she received from her colleagues. Maribel appreciates the example of the many Firm leaders who demonstrate a work-life balance and hopes to emulate this in her own career. In her new role, Maribel looks forward to broadening her technical tax skills and becoming someone at the Firm who others will view as a resource. 

Shannon is a member of Bowman’s CAAS department, who is valued by her coworkers and clients. A tenacious professional, Shannon recalls overcoming the challenge of transitioning from paper to paperless transactions and was grateful to work with an amazing team that she can count on for support and assistance. During her time with the Firm, she has great memories of events such as the annual Fun Friday and holiday parties. Shannon is inspired by a quote from John Quincy – “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” She is looking forward to putting that philosophy to work in her new role, helping the department grow through professional development and mentoring new staff members.  

Congratulations Robert, Monica, Maribel, and Shannon!