Corporate Transparency Act requires most dental practices to begin reporting ownership information
Download/Print Risk Alert (PDF)
January 17, 2024
Dental practice owners should be aware of a law that recently went into effect that may require disclosure of information regarding ownership and control of their business. The Corporate Transparency Act (CTA) took effect on January 1, 2024, and it requires certain businesses to report information about their ownership to the U.S. Department of the Treasury's Financial Crimes Enforcement Unit (FinCEN). The CTA was enacted by Congress in 2021 to combat the use of businesses as money-laundering operations.
Per the CTA, dental practices that were created or registered to do business in the U.S. before January 1, 2024 must file a “beneficial ownership information” (BOI) report to FinCEN by January 1, 2025. Practices are required to comply with reporting if they meet one or both of the following criteria:
- The practice employs fewer than 20 people full-time.
- The practice generates less than $5 million (gross receipts) in revenue annually, as reported on the practice’s prior year’s federal tax filing.
Dental practices that are required to file a BOI report will need to provide information on the practice itself as well as its “beneficial owners.” A “beneficial owner” is defined as someone who owns or controls at least 25% of the business OR who exercises substantial control over the business.
All existing companies, including dental practices, that meet CTA reporting requirements have until January 1, 2025 to file a BOI report to FinCEN before facing potential penalties. Failing to file a BOI report, knowingly providing false information, or refusing to provide you information if you are a beneficial owner can all carry both civil and criminal penalties. Civil penalties include fines of up to $500 per day until the violation is fixed. Criminal penalties include fines of up to $10,000 and/or imprisonment for up to two years.
Visit fincen.gov/boi to file a report, view informational videos and webinars, find answers to frequently asked questions, connect to the contact center and learn more about how to file a BOI report. FinCEN’s Small Entity Compliance Guide walks small businesses through the requirements. The ADA has also created a FAQ document to help dentists with questions.
For those who have questions regarding the specifics of the CTA, including whether a particular person qualifies as a beneficial owner and requirements for ongoing compliance, it is recommended to consult with your practice’s legal counsel.
References
American Dental Association (ADA). (2024). Corporate Transparency Act: Information for dental practices. Retrieved January 17, 2024, from https://www.ada.org/~/media/project/ada%20organization/ada/ada-org/files/resources/practice/practice-management/WhatistheCorporateTransparencyAct
Burger, D. (2024). Corporate Transparency Act requires most dental practices to report information about their ownership. ADA News. Retrieved January 17, 2024, from https://adanews.ada.org/ada-news/2023/december/corporate-transparency-act-requires-most-dental-practices-to-report-information-about-their-ownership/?mktId=14404095
Financial Crimes Enforcement Network. (2023). Small Entity Compliance Guide. U.S. Department of the Treasury. Retrieved January 17, 2024, from https://www.fincen.gov/boi/small-entity-compliance-guide
Quick, W. (2024). Corporate Transparency Act: What dentists need to know. Dentistry IQ. Retrieved January 17, 2024, from https://www.dentistryiq.com/practice-management/article/14303058/corporate-transparency-act-what-dentists-need-to-know