The Financial Crimes Enforcement Network began accepting beneficial ownership information reports on Jan. 1, and all existing dental practices and companies that meet the requirements have one year to file before facing penalties.

Dental practices must file under the act if it meets 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.

Reporting companies created or registered to do business in the U.S. before Jan. 1, 2024, must file by Jan. 1, 2025.

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.

Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information.

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

For the business:

·     Practice’s legal name.

·     Any trade names.

·     Practice’s current address.

·     The jurisdiction (state, territory, or District of Columbia) in which the business was formed.

·     The business’s tax ID number.

For the beneficial owners:

·     Name.

·     Date of birth.

·     Residential address.

·     An ID number from one of the following forms of. identification: driver’s license, passport, or state I.D.

·     A copy of the form of identification used.

Employees of a dental practice need do nothing unless they are significantly involved in making business or financial decisions for the practice. In that case, the employee may be asked to provide their information as a beneficial owner.

A letter from the ADA to the U.S. Senate will be sent the week of Jan. 8 urging them to pass legislation extending the deadline for companies to report ownership information.

“The vast majority of dental practices are small businesses that would be subject to these burdensome reporting requirements, and an extension of the deadline would allow both dental practices and FinCEN to have time to prepare for reporting,” according to the letter. “Dental practices are already under a heavy administrative burden and complying with the new Corporate Transparency Act would only make that burden heavier … Extending reporting deadlines would allow FinCEN more time to educate the public on reporting, and would help dental practices and other small businesses to be able to better understand what is required of them.”

“We are working on understanding this requirement and asking for more time to allow us to provide guidance to our members,” Dr. Ottley said.

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 report. FinCEN’s Small Entity Compliance Guide walks small businesses through the requirements.

The ADA created a FAQ document to help dentists with questions.