Who is FinCEN?
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the United States Department of the Treasury. FinCEN’s mandate is to investigate and prevent financial crimes, like money laundering and terrorism financing. The Corporate Transparency Act gives FinCEN a new responsibility: collecting Beneficial Ownership Information from U.S. business entities.
The Corporate Transparency Act (CTA) requires almost all business entities in the U.S. to submit Beneficial Ownership Information (BOI) reports to FinCEN. FinCEN is tasked with storing BOI reports in a secure government database that is not available to the public.
What is FinCEN’s Purpose?
FinCEN combats illegal financial activity by working closely with banks and institutions to scrutinize financial transactions. FinCEN serves as the national center for compilation analysis, dissemination of information regarding potential financial crimes.
FinCEN’s responsibilities include:
- Analyzing financial transaction reports.
- Assisting law enforcement and regulatory agencies by sharing financial intelligence.
- Administering anti-money laundering programs, like the Bank Secrecy Act (BSA).
- Enforcing financial sanctions instituted by the U.S. Department of Treasury’s Office of Foreign Asset Controls (OFAC), and
- Collecting Beneficial Ownership Information reports from U.S. businesses under the CTA.
FinCEN analyzes over 2 million reports submitted by banks and financial institutions each year. These reports include:
- Suspicious Activity Reports (SARS),
- Reports of Foreign Bank and Financial Accounts (FBAR), and
- Currency Transaction Reports.
The Corporate Transparency Act tasks FinCEN with collecting Beneficial Ownership Information from legal entities in the U.S. and maintaining a secure BOI database. FinCEN administers BOI reporting through its online filing system.
Who has access to Beneficial Ownership Information?
FinCEN’s beneficial ownership registry is not available to the public. FinCEN grants law enforcement agencies limited access to the BOI database for purposes of investigating potential financial crimes. Banks can also obtain access to BOI for purposes of ensuring compliance with Know Your Customer (KYC) laws when opening accounts.
Here are the fast facts about FinCEN’s Beneficial Ownership database:
- BOI reports are maintained in a secure government database.
- BOI information is not publicly available.
- Law enforcement agencies have limited access to Beneficial Ownership Information.
- Banks can access BOI reports with permission from the reporting company.
- You cannot obtain BOI reports from FinCEN, even of your own business entities.
FinCEN requires Federal, State, local and Tribal officials, as well as certain foreign officials, to submit a formal request to gain access to Beneficial Ownership Information. Government agencies can only obtain BOI information for authorized purposes related to national security, intelligence, and law enforcement.
Financial institutions, like banks, may gain access to Beneficial Ownership Information, but only under specific circumstances. A financial institution will need to obtain consent from the reporting company itself before being given access to the company’s BOI information by FinCEN.
Is FinCEN Part of the IRS?
FinCEN and the IRS are separate entities. Each has their own separate funding from Congress. Both the IRS and FinCEN are bureaus of the United State Department of Treasury. However, the two agencies have completely separate roles and responsibilities.
The Financial Crimes Enforcement Network (FinCEN) was established to safeguard the global financial system by detecting and preventing financial crimes. FinCEN is focused on analysis of financial transactions, and the gathering of financial intelligence. FinCEN’s functions are critical in the battle against money laundering, terrorism financing, and other illegal activity.
The Internal Revenue Service (IRS) is primarily responsible for collecting taxes and enforcing tax laws in the United States. The IRS oversees various forms of federal taxation, including income, corporate and payroll taxes. The IRS is also responsible for ensuring tax compliance, processing tax returns, issuing refunds and conducting audits.
Despite being separate agencies, FinCEN and IRS may collaborate when their investigations overlap. For example, in cases that involve tax-related financial crimes.
Does FinCEN Have a Phone Number for Questions?
You can reach FinCEN at 1-800-767-2825 and leave a message. However, currently, FinCEN is not returning calls to answer questions about the Corporate Transparency Act.
FinCEN is setting up call centers and also has an email address, FRC@Fincen.gov. They are monitoring this email to identify common questions for future broad addressing. Currently, FinCEN does not reply to individual email queries.
For guidance and information about the Corporate Transparency Act, visit FinCEN’s website at FinCEN.gov/boi, where they have posted various resources and guides.