What Happens If I Don’t File BOI?

Running a small business comes with a seemingly endless list of tasks, and keeping up with new regulations can feel overwhelming. Beneficial Ownership Information (BOI) reporting, a requirement for most small businesses in the U.S. under the Corporate Transparency Act (CTA), might seem like just another burden.

But ignoring it can lead to serious consequences—financially, legally, and operationally.

If you’re wondering, “What happens if I don’t file my BOI report?”—this article is for you. Let’s break down what happens if you don’t file and why compliance should be a top priority for your business.

You’ll Be Subject to Daily Fines

Missing a BOI report deadline can quickly lead to financial penalties. Under the Corporate Transparency Act, businesses that fail to file or update their BOI reports can be fined $500 per day, starting from when the report was due.

$500 per day may not seem like much initially, but it adds up quickly. For example:

After 10 days, that’s $5,000.
After 20 days, you’re at the maximum penalty for this one entity of $10,000.

But what if you have multiple entities? It’s $10,000 per entity that is late.

The longer you go without filing, the more costly it becomes. $10,000 is significant for any small business, especially considering how easily avoidable these fines are. Filing on time is a simple solution that saves you from unnecessary financial loss.

Pro Tip: BOI reporting deadlines are strict, but with the right guidance, you can avoid these penalties entirely by staying proactive.

You Could Face Criminal Charges

Financial penalties are just the beginning. In cases where your failure to file is considered “willful”—meaning you knew about the requirement and deliberately chose not to comply—you could face criminal penalties. According to the CTA, willful non-compliance can result in up to two years in actual prison.

You may be thinking, “I’m not doing anything illegal, so why would I be charged criminally?” But the law is clear: ignoring your BOI reporting obligations could be considered a willful act. Failing to comply with federal regulations can put you in legal jeopardy, even if you have no ill intent.

Solution: Staying ahead of your BOI reporting obligations guarantees you’ll never face these extreme consequences.

You Risk Damaging Your Business’s Reputation

Aside from fines and potential criminal penalties, non-compliance with BOI reporting can damage your business’s reputation. Whether you realize it or not, regulatory non-compliance can create trust issues with your clients, partners, and vendors.

Imagine trying to secure a loan or attract investors, only for them to discover that your business is facing hefty fines or legal battles due to non-compliance with BOI reporting. It sends the message that your business doesn’t take its legal obligations seriously, which can make others wary of doing business with you.

A tarnished reputation is hard to rebuild, and once trust is broken, it can be difficult to regain. Filing your BOI report on time helps protect your business’s reputation and demonstrates that you are operating responsibly and within the law.

Important Observation: Staying compliant with BOI reporting doesn’t just keep you safe from penalties; it also shows your clients, investors, and partners that your business operates with transparency and integrity. This trust can make a big difference when seeking funding or growing your business.

The Problem Doesn’t Go Away—It Only Gets Worse

Ignoring the BOI reporting requirement won’t make it disappear. If you fail to file, FinCEN isn’t going to forget about it. The agency will eventually catch up with non-compliant businesses through audits, investigations, or data matching with other federal agencies like the IRS.

At that point, you’ll not only be facing fines, but you’ll also have to file the required report retroactively. Fixing the problem after the fact is always more expensive and time-consuming than doing it correctly in the first place. You could find yourself paying fines, spending time fixing old reports, and dealing with the fallout of legal proceedings—all while trying to keep your business running smoothly.

Pro Tip: Taking care of BOI reporting upfront is the easiest and most cost-effective way to stay compliant. Our monitoring services ensure you don’t miss a filing requirement, saving you from future headaches.

You Could Be Audited

Failing to file your BOI report could raise red flags with regulatory agencies, potentially increasing the likelihood of an audit. FinCEN and the IRS can compare your BOI report with other federal filings, such as your tax returns. If there are discrepancies, or if you haven’t filed a BOI report, this could trigger further scrutiny.

Audits are time-consuming, stressful, and expensive. They can pull you away from running your business and force you to focus on legal and financial matters. The best way to avoid the potential headache of an audit is to stay compliant with BOI reporting requirements from the outset.

We’ve got you covered if you’re looking for more reasons why BOI reporting is critical for your business. Check out our blog Why Business Owners Can’t Ignore BOI Reporting to learn more about the importance of compliance and how BOI regulations affect small businesses.

How to Avoid These Consequences: Partner with Experts

The bottom line is that failing to file your BOI report can lead to costly fines, potential criminal charges, and damage to your business’s reputation. However, compliance doesn’t have to be overwhelming, and you don’t have to tackle this reporting requirement alone.

At Whirks, we specialize in helping small businesses simplify their financial complexities, which includes the intricacies of BOI reporting. We’ve partnered with a top-tier reporting and monitoring system to ensure your reports are filed correctly, on time, and updated whenever necessary. Our team is well-versed in the nuances of BOI reporting and the enforcement actions that can arise from non-compliance, so you can rest easy knowing your business is protected.

Don’t Let BOI Reporting Slip Through the Cracks

Failing to file your BOI report isn’t just a minor oversight—it can lead to serious financial penalties, legal consequences, and reputational damage. Don’t leave your business exposed.

At RCN CPAs & Business Advisors, we offer a comprehensive BOI service that covers the initial filing and ongoing monitoring, along with timely reminders so you stay compliant year-round.

Let us handle the complexities so you can focus on running your business with confidence. Contact us today to learn how we can assist with your BOI reporting and protect your business from costly mistakes.