FinCEN IDs vs. ID documents
Learn about the tradeoffs between filing beneficial owner reports with ID documents and individual FinCEN IDs.
This guide compares the approaches of asking clients to acquire a FinCEN ID vs. including their ID information directly in the report. There is a difference and it has an impact on your client's responsibilities - Transparency supports both of these scenarios and it is up to your discretion.
What is an individual FinCEN ID?
An individual FinCEN ID is issued by FinCEN for individuals through FinCEN's online portal. A beneficial owner can obtain a unique 12-digit ID by providing FinCEN with the following identity information:
Full legal name
Date of birth
Home address
Unique identifying number and issuing jurisdiction from an acceptable identification document
An image of the identification document
It can be used instead of submitting this information in a beneficial owner information report (BOIR). The beneficial owner acquires a FinCEN ID and includes that in the BOIR in place of their identity information.
Why would one use an individual FinCEN ID vs. ID documents?
There are a few notable benefits to using FinCEN IDs in a report:
The identity information is provided directly to FinCEN and not through any 3rd parties (e.g. a law firm, a filing service like Transparency, etc).
The final PDF transcript will only include this 12-digit ID and will not include any of the owner's personal information (in contrast, if the personal information is submitted in the BOIR, their personal information is included in the final PDF report).
The beneficial ownership report for the company does not need to be re-submitted if there's a simple change to the owner's identity information (however, it does need to be re-submitted if any ownership changes).
However, there are a few downsides that one should be aware of:
The identity information used to get an individual FinCEN ID must be kept up-to-date indefinitely and there is currently no way to deactivate an individual's FinCEN ID that is no longer in use.
There is some difficulty to acquiring a FinCEN ID since owners must create a login.gov account.
What does this mean for beneficial owners?
We will contrast two scenarios below to help illustrate the differences.
With individual FinCEN IDs
For example, let's say Jane is a beneficial owner of a company and she wants to use an individual FinCEN ID in her beneficial ownership report:
She goes to FinCEN's online portal, creates a login.gov account, submits her identity information, and gets a 12-digit FinCEN identifier.
She provides this identifier to her attorney via a secure channel and the attorney submits a beneficial ownership report to FinCEN on her company's behalf.
She receives a PDF transcript of the filing that includes only her FinCEN ID and those of her company's beneficial owners.
A few months later, she moves to a new address. Since she has an individual FinCEN ID, she is personally responsible for re-filing her new address with FinCEN within 30 days.
However, the company filing does not need to be re-submitted, since the individual FinCEN ID which was originally included in the report has not changed.
Now, here's where the difference comes in:
Later, she sells her interest in the company to an existing owner. She is not a beneficial owner anymore.
The company is required to re-file the beneficial ownership report (with her removed as a beneficial owner) within 30 days.
However, she continues to be responsible for updating the information associated with her FinCEN ID (or, once the option exists, deactivating her ID, if it's not associated with any other companies).
It's important to note that, in either case, the individuals and corporate entities can both be held liable for violations.
Without individual FinCEN IDs
In this example, Jane is a beneficial owner of a company and she includes her ID information in her beneficial ownership report:
She provides her identity information (full legal name, a scan of her ID document, etc.) to her attorney via a secure channel and the attorney submits a beneficial ownership report to FinCEN on her company's behalf.
She receives a PDF transcript for the filing that includes some of her identity information.
A few months later, she moves to a new address.
The company filing must be re-submitted within 30 days, since the information which was originally included in the report has changed.
A major difference from the previous example:
Later, Jane sells her interest in the company to an existing owner. She is not a beneficial owner anymore.
The company is required to re-file the beneficial ownership report (with her removed as a beneficial owner) within 30 days.
Jane is not responsible for anything, since she is no longer associated with the company.
The key difference here is how information is filed and the responsibilities for filing - with individual FinCEN identifiers, the responsibility primarily falls on the beneficial owner to keep their information up-to-date with FinCEN. However, without a FinCEN ID, the company filing is the only update needed when the owner information changes.
Transparency can help
Our platform guides you and your clients through these nuances so you can easily file and keep the reports up-to-date.
