Exempt Entities

Question:  If an entity is exempt from filing a FinCEN Report, is its wholly-owned subsidiary also exempt from filing a FinCEN Report?

Answer: A subsidiary of an entity that is exempt from filing a FinCEN Report is also exempt from filing a FinCEN Report if the subsidiary entity’s ownership interests are controlled or wholly owned, directly or indirectly, by any of these types of exempt entities:

• Securities reporting issuer, as defined in Exemption #1;
• Governmental authority, as defined in Exemption #21;
• Bank, as defined in Exemption #3;
• Credit union, as [. . .]
  

Question: Is an entity that assists a tax-exempt entity exempt from filing a FinCEN Report?

Answer: An entity qualifies for this exemption if all four of the following criteria apply:

1. The entity operates exclusively to provide financial assistance to or hold governance rights over, any tax-exempt entity that is exempt from filing a FinCEN Report.

2. Is The entity is a United States person as defined in section 7701(a)(30) of the Internal Revenue Code of 1986.

3. The entity [. . .]

Question:  Is a tax-exempt entity exempt from filing a FinCEN Report?

Answer: An entity qualifies for this exemption if any of the following four criteria apply:

1. The entity is an organization that is described in section 501(c) of the Internal Revenue Code of 1986 (Code) (determined without regard to section 508(a) of the Code) and exempt from tax under section 501(a) of the Code.

2. The entity is an organization that is described in section 501(c) [. . .]

Question:  I have an inactive entity.  Must it file a FinCEN Report?

Answer: An inactive entity does not have to file a FinCEN Report if all six of the following criteria apply:

1. The entity was in existence on or before January 1, 2020.

2. The entity is not engaged in active business.

3. The entity is not owned by a foreign person, whether directly or indirectly, wholly or partially. “Foreign person” means a person who is not a United States person. A [. . .]

Question: My company has a lot of employees.  Is it exempt from filing a FinCEN Report?

Answer: An entity is exempt from filing a FinCEN Report if all six of the following criteria apply to the entity:

1. The entity employs more than 20 full time employees, when applying the meaning of full-time employee provided in 26 CFR 54.4980H-1(a) and 54.4980H-3. In general, “full-time employee” means, with respect to a calendar month, an employee who is employed an average of at least 30 [. . .]