Member Benefits Spotlight: Important Regulatory Alert

Apr 18, 2024
Alerting members about the latest federal, state, and local regulatory requirements is a valuable member benefit.
This email provides detailed information on a new filing requirement that applies to small business, including dental practices, that meet basic requirements, to report ownership information to the U.S. Department of the Treasury’s Financial Crimes Enforcement Unit (FinCen).

The Corporate Transparency Act was enacted by Congress in 2021 to combat the use of businesses as money-laundering operations. The Financial Crimes Enforcement Unit began accepting beneficial ownership information reports on Jan. 1, 2024.

  • Existing dental practices (created before January 1, 2024) have until December 31, 2024 to file with the Financial Crimes Unit before facing penalties.
  • New dental practices (created after December 31, 2023) have 90 days from the day of creation to file before facing penalties.

Beneficial ownership information only needs to be submitted once, unless the filer needs to update or correct information. There is no filing fee.

            The ADA created a FAQ document to help dentists with questions 

See if You Need to File:
Dental practices must file under the act if they meet one or both of the following criteria:
  • The practice employs fewer than 20 people.
  • The practice generates less than $5 million (gross receipts) in revenue annually.
Failing to file a report, knowingly providing false information or refusing to provide 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

According to the statute, a “beneficial owner” need not necessarily own shares or have a financial stake in the business.

A beneficial owner owns or controls at least 25% of the business or exercises substantial control over the business.

The final rule clarifies that “substantial control” includes senior officers of a business, as well as anyone with significant influence over important decisions, even if that person has no formal decision-making power. That also extends to any contractual or financial relationships. “For those uncertain whether a particular person qualifies as a beneficial owner, it is recommended to consult legal counsel when making determinations on beneficial ownership,” said Jeffrey Ottley, D.M.D., ADA Council on Dental Practice chair.

Information Necessary to File a Report

Dental practices will need to report information on both the practice itself and its “beneficial owners”:

The following information should be available before completing the BOI form:
  • legal name and trade name of the practice and the practice address
  • the state where the practice was formed and the business tax identification number issued
  • the name, date of birth, residential address and an identification number from a driver’s license, passport or state identification of Beneficial Owner(s).

    •   Visit fincen.gov/boi to file a report and to learn more about how to report 

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