BOI Penalties: Civil and Criminal Consequences

Civil Penalties: $500 Per Day Under 31 USC 5336(h)

The Corporate Transparency Act establishes civil penalties for BOI violations at 31 USC 5336(h)(3)(A). Any person who willfully fails to report complete or updated beneficial ownership information to FinCEN, or who willfully provides or attempts to provide false or fraudulent beneficial ownership information, is subject to a civil penalty of not more than $500 for each day the violation continues or has not been remedied. The penalty accrues daily from the date the violation begins until the violation is corrected. For a failure to file an initial report, the violation begins on the day after the filing deadline. For a failure to update information, the violation begins on the day after the 30-day update window expires. The $500 per day amount is subject to annual inflation adjustments under the Federal Civil Penalties Inflation Adjustment Act of 2015. The adjusted amount for 2026 may exceed $500. There is no statutory maximum cap on total accumulated civil penalties, meaning a company that fails to file for an extended period could face penalties of $182,500 per year or more. FinCEN retains enforcement discretion in assessing actual penalty amounts and may consider factors such as the company's size, willfulness of the violation, and efforts to comply.

31 USC 5336(h)(3)(A); Federal Civil Penalties Inflation Adjustment Act of 2015

What "Willful" Means in BOI Enforcement

Both civil and criminal BOI penalties require that the violation be "willful." This is a critical threshold that limits FinCEN's enforcement reach. In the context of federal financial reporting statutes, willfulness generally requires that the person knew of the legal obligation and voluntarily and intentionally violated it. For criminal penalties, the government must prove willfulness beyond a reasonable doubt. For civil penalties, the standard is preponderance of the evidence, but willfulness is still required. This means a reporting company owner who genuinely did not know about the BOI filing requirement would not meet the willfulness standard. However, willful blindness, where a person deliberately avoids learning about obligations, can satisfy the willfulness element. FinCEN has indicated in guidance that it expects entity owners to be aware of their filing obligations and will consider whether reasonable steps were taken to determine compliance requirements. Engaging a professional service provider for compliance assistance, such as the CSF managed BOI filing service, creates a record of good-faith compliance effort that weighs against a willfulness finding in any future enforcement action.

31 USC 5336(h)(3); cf. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (willfulness in statutory context)

Safe Harbor: 90-Day Correction Window

FinCEN established a safe harbor provision under 31 CFR 1010.380(a)(4) that provides penalty protection for companies that file reports with inaccurate information but correct the errors within 90 calendar days. The safe harbor applies when a reporting company submits an initial, updated, or corrected BOI report that contains inaccurate information. The company then has 90 days from the date the report was filed, or 90 days from the date the company became aware of or should have become aware of the inaccuracy, whichever is later, to file a corrected report. If the corrected report is filed within the 90-day window, the company is not subject to civil or criminal penalties for the initial inaccuracy. The safe harbor does not apply to willful fraud or knowing submission of false information with no intent to correct. It also does not apply to a complete failure to file. The safe harbor is designed to protect companies that make good-faith efforts to comply but inadvertently report incorrect information. Common errors that the safe harbor covers include transposed digits in identification numbers, outdated residential addresses, and incorrect ownership percentage calculations.

31 CFR 1010.380(a)(4); FinCEN BOI FAQ G.5

Practical Steps to Avoid BOI Penalties

For domestic entities including Wyoming LLCs, no action is currently required. The domestic exemption under the March 2025 IFR eliminates filing obligations and therefore penalty exposure. However, monitoring the regulatory landscape is essential because FinCEN has indicated it intends to conduct further rulemaking that may reimpose domestic filing obligations. For foreign reporting companies that remain obligated, the following steps minimize penalty risk: file your initial BOI report before the applicable deadline; update the report within 30 days of any change in beneficial ownership or reported information; review your filing for accuracy and correct any errors within the 90-day safe harbor window; maintain records of all filed reports and supporting documentation; designate a responsible person within the organization for ongoing BOI compliance. CSF offers managed BOI filing at $150 per filing, which includes preparation of the report, submission to FinCEN, and record retention. This service is available for both domestic entities that may need to file in the future and foreign reporting companies that are currently obligated.