FinCEN Clarifies TIN Reporting for Disregarded Entities Under CTA

The Financial Crimes Enforcement Network (FinCEN) published an update to its Frequently Asked Questions (FAQs) on July 24 clarifying the taxpayer identification number (TIN) disregarded entities should use in beneficial ownership reporting. The agency addressed compliance with the reporting requirements of the Corporate Transparency Act for disregarded entities in different circumstances.

A reporting company that is disregarded for tax purposes must report beneficial ownership information (BOI), including a taxpayer identification number. The BOI for a disregarded entity must include one of the following types of TINs:

• If the disregarded entity has its own employer identification number (EIN), it may report its EIN as its TIN. A disregarded entity is not required to obtain an EIN to meet its BOI reporting requirements, so long as it instead provides another type of TIN, or if a foreign reporting company not issued a TIN, a taxpayer identification number issued by a foreign jurisdiction and the name of that jurisdiction.
• If the disregarded entity is a single member limited liability company or otherwise has only one owner that is an individual with a social security number (SSN) or individual taxpayer identification number (ITIN), it may report the individual’s SSN or ITIN.
• If the disregarded entity is owned by a U.S. entity that has an EIN, it may report that entity’s EIN as its TIN.
• If the disregarded entity is owned by another disregarded entity or a chain of disregarded entities, it may report the TIN of the first owner in the chain of disregarded entities that has a TIN as its TIN.

If the disregarded entity is a single member limited liability company or otherwise has only one individual owner, it may consider obtaining its own EIN rather than reporting the individual owner’s SSN or ITIN.

Please contact Hal West, Trevor Haynes or any member of Phelps’ Business team with questions or for advice and guidance.