BOI Updates: UPL, Federal Court Case and More

CPAs in New Jersey and across the country are grappling with whether to provide beneficial ownership information (BOI) filing services to clients. Here’s the latest: 

UPL Determination

• In February, the NJCPA submitted a request to the New Jersey Supreme Court’s Committee on the Unauthorized Practice of Law (UPL) to determine whether BOI filing would be considered UPL in New Jersey. The committee reviewed our request at their March meeting and will be discussing it again at their late June meeting. It is unclear when they will issue a formal opinion.
• On May 8, the Maryland Attorney General provided his opinion on BOI and whether it is UPL. Below is an excerpt. The full decision is available here.
  "In our opinion, the Maryland courts would most likely hold that a CPA may, without violating the prohibition on unauthorized practice of law, provide clients general information about the Transparency Act and the BOIR requirement without tailoring the information to any client’s individual situation, or fill out and file a BOIR form using a list of beneficial owners submitted by the client. Though the question is closer, a CPA likely also may help a client to determine whether it is a “reporting company,” or to identify its “beneficial owners” within the meaning of the Transparency Act, by walking the client through FinCEN’s instructions, by defining terms that are familiar to nonlawyers and/or CPAs, or by answering questions for the client where the question and answer do not call for legal knowledge or skills. However, a CPA generally should not answer a BOIR-related question for a client where there is uncertainty as to the answer and resolving that uncertainty would require legal knowledge, skill, and judgment."
• CAMICO, the NJCPA’s preferred provider of accountants’ malpractice insurance, has said that these services will be covered unless and until it is determined to be UPL in New Jersey.

Impact of Federal Court Case

• A recent federal court ruling in the case of NSBA v. Yellen has caused some confusion. The case is being appealed, but, ultimately, the court’s decision will only apply to businesses that were members of the NSBA as of March 1.
• The AICPA, NJCPA and all other state CPA societies recently sent a letterr to the U.S. Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN), to voice serious concerns regarding the enforcement of the BOI reporting requirements and to ask that all enforcement actions be suspended until one year after the conclusion of all court cases related to NSBA v. Yellen.
• The AICPA recommends that businesses continue to file BOI reports now rather than wait for the outcome of the appeal.

Engagement Letter Recommendations

• If your firm has decided not to provide BOI services, CAMICO recommends you amend your engagement letter to disclaim your firm’s involvement. Click here for sample language (see pages 6-7). Page 7 of that document also provides sample language for firms that do anticipate providing BOI filing services.

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