As the new year approaches, CPA firms face critical regulatory changes, most notably the Beneficial Ownership Information (BOI) reporting requirements. With a January 1, 2025 deadline, these requirements introduce stricter standards and potential penalties—up to $500 per day—for non-compliance. However, BOI reporting isn’t the only regulation impacting CPA firms in 2025; new data privacy and cybersecurity laws, along with updates in tax policy, also demand attention.
This article provides CPA firm owners with practical insights on preparing for the new BOI reporting requirements while covering additional compliance areas, ensuring your firm remains compliant and safeguards client trust.
Key 2025 CPA Regulations
Beneficial Ownership Information (BOI) Reporting Requirements
The Financial Crimes Enforcement Network (FinCEN) has introduced stricter standards for BOI reporting, aimed at enhancing transparency around beneficial ownership. These requirements carry substantial penalties for non-compliance, making it essential for CPA firms to understand and meet these obligations.
BOI Reporting Updates for 2025
- Expanded Reporting Obligations:
New entity types, such as limited liability partnerships (LLPs) and certain foreign entities conducting business in the U.S., are now required to file BOI reports. This change closes previous gaps in ownership reporting. - Ongoing Update Requirements:
BOI reporting is not a one-time task. If any ownership or control changes occur, firms are required to submit updated BOI information within 30 days. - Cross-Verification with State and Financial Entities:
FinCEN is now working closely with state authorities and financial institutions to cross-verify beneficial ownership data. This collaboration heightens the need for accurate and timely BOI submissions, as discrepancies are more likely to be flagged.
How CPA Firms Can Prepare
- Review and Update Ownership Records Regularly: Ensure that beneficial ownership information is accurate, particularly after changes in ownership or company structure.
- Familiarize Your Team with BOI-eFile: The IRS’s new BOI-eFile platform is designed to streamline BOI reporting, reducing the risk of penalties for late or inaccurate filings. This platform allows firms to cross-check data, minimizing errors and enhancing compliance.
BOI Reporting Deadlines to Remember
- January 1, 2025: Initial filing deadline for entities formed before January 1, 2024.
- 30 Days After Ownership Changes: Required for any significant ownership or control changes.
- Post-Creation Deadlines for New Entities: Entities created in 2024 must file within 90 days of creation, while those formed on or after January 1, 2025, have 30 days.
Remaining proactive with these deadlines will help CPA firms avoid fines and maintain compliance in 2025.
Why BOI Compliance Is Essential for CPA Firms
Non-compliance with BOI and data privacy requirements can lead to severe financial, reputational, and legal risks, including:
- Daily Financial Penalties: Non-compliance can incur fines of up to $500 per day.
- Reputational Damage: Regulatory scrutiny from non-compliance can erode client trust.
- Potential Criminal Charges: In severe cases, firms may face criminal charges, impacting stability and trustworthiness.
Additional 2025 CPA Regulations
Beyond BOI reporting, 2025 introduces other regulatory changes that CPA firms should prioritize to ensure comprehensive compliance. Here’s a brief overview:
1. Data Privacy and Cybersecurity Regulations
Protecting client data is paramount for CPA firms, and 2025 brings new regulations aimed at enhancing data privacy and cybersecurity standards. Non-compliance could lead to significant fines and potential reputational damage.
New Requirements:
- Stricter Data Privacy Standards: Many states are implementing new privacy laws requiring consent-based data collection and giving clients greater rights over their data.
- Enhanced Cybersecurity Measures: The FTC’s updated Safeguards Rule mandates encryption of sensitive data and regular vulnerability assessments to protect against cyber threats.
How to Prepare:
- Invest in Cybersecurity Infrastructure: Implement firewalls, encryption, and conduct regular data audits.
- Conduct Staff Training: Educate your team on handling sensitive data and recognizing potential cyber threats, as employees are often the first line of defense.
By adopting robust data privacy measures and preparing for these regulatory changes, CPA firms can protect client trust and avoid costly penalties.
2. Tax Policy Updates
New tax filing requirements and changes to deductions are expected in 2025, impacting CPA firms’ workflows and client advisory roles.
Key Changes:
- Updated Filing Requirements: New reporting standards for partnerships and complex entities may introduce additional disclosures.
- Adjustments to Deductions: Expect changes in allowable deductions, including potential restrictions on business expense deductions and adjustments to bonus depreciation rates.
How to Prepare:
- Ongoing Training: Invest in regular training sessions to keep your team informed about the latest tax policies.
- Client Advisory: Proactively update clients on these tax changes, helping them adapt their financial strategies and reinforcing your firm’s role as a trusted advisor.
Proactive Steps to Meet 2025 CPA Regulation Requirements
Meeting 2025’s regulatory standards requires a proactive approach to stay ahead of compliance risks. Here’s how CPA firms can prepare:
1. Implement a Compliance Strategy
Establish a compliance strategy that includes standard procedures for BOI reporting, data privacy, and tax updates. Consistent procedures reduce the risk of missed deadlines or errors.
- Assign Compliance Roles: Designate a compliance officer responsible for overseeing regulation adherence across the firm.
- Schedule Regular Audits: Conduct audits to ensure processes align with the latest standards.
2. Leverage Automation to Simplify Compliance
Automation tools can make tracking and reporting easier, reducing manual work and ensuring timely updates for BOI, data privacy, and tax compliance.
- Document Management Systems: Automate data collection and submission for BOI and tax compliance.
- Cybersecurity Tools: Use automated threat detection and vulnerability assessments to secure client data.
Implementing these tools can streamline your compliance processes, helping your firm stay on track with regulatory requirements.
Protect Your CPA Firm’s Future with Proactive Compliance
As a CPA firm, staying proactive about regulatory changes is essential. At GreenGrowth CPAs, we’re here to guide you through these CPA regulation changes and ensure your business remains fully compliant.
Schedule a consultation today to discuss how we can help your firm navigate 2025’s regulatory changes.
For more detailed information, be sure to read our previous article: BOI Reporting Update: Key FAQs and Tips Before 2025 Deadline
This article is for informational purposes only and does not constitute legal advice or services related to FinCEN BOI compliance or BOI reporting rules.
