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Federal Register / Vol. 86, No. 233 / Wednesday, December 8, 2021 / Proposed Rules the final promulgated rules and regulations, among other items. FinCEN
welcomes additional comments describing these items in more detail and ways in which FinCEN may address them in its rule.
FinCEN appreciates the issues the commenters raised regarding the possibility of state, local, and Tribal governments incurring indirect costs due to the BOI reporting requirement, particularly in the form of compliance questions being directed to such authorities. State, local, and Tribal governments play an important role in spreading awareness to entities, many of which may have no knowledge of FinCEN or about the new BOI reporting requirements. FinCEN endeavors to make publicly available clear and concise guidance documents. FinCEN
will work closely with state, local, and Tribal governments to ensure effective outreach strategies for implementation of the eventual final rule.204
Additionally, FinCEN has a call center the Regulatory Support Section which will receive incoming inquiries relating to the CTA and its implementation.
Finally, FinCEN considered and ultimately decided not to propose an alternative that would have relied upon state, local, and Tribal governments in the collection and reporting of BOI.
FinCEN is not aware at this time of disproportionate budgetary effects of this proposed rule upon any particular regions of the nation or particular state, local, or Tribal governments; urban, rural or other types of communities; or particular segments of the private sector.205 The wide-reaching scope of the reporting company definition means that the proposed rule would apply to entities across multiple private sector segments, types of communities, and nationwide regions. FinCEN
acknowledges that there is potential variance in the concentration of reporting companies by region due to variation in corporate formation rates and laws. FinCEN also acknowledges that the statutory exemptions to the reporting company definition may in practice result in segments of the private sector not being affected by the proposed rule; thereby causing those that are affected to be disproportionately so compared to exempt entities. FinCEN
welcomes any estimates on how such regions, and the regions related 204 Multiple ANPRM comments from state authorities spoke to the feasibility of adding an internet link to their websites.
205 Though entities that have chosen complex ownership structures are likely to face higher burden, FinCEN is not aware of a particular segment of the private sector that this would disproportionately affect.

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governments, could be disproportionately affected by this proposed rule. FinCEN also welcomes any input on estimated disproportionate budgetary effects for particular segments of the private sector.
FinCEN does not at this time have accurate estimates that are reasonably feasible regarding the effect of the proposed rule on productivity, economic growth, full employment, creation of productive jobs, and international competitiveness of United States goods and services.
D. Paperwork Reduction Act The new reporting requirements in this proposed rule are being submitted to OMB for review in accordance with the Paperwork Reduction Act of 1995 206
PRA. Under the PRA, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.
Written comments and recommendations for the proposed information collection can be submitted by visiting www.reginfo.gov/public/do/
PRAMain. Find this particular document by selecting Currently Under ReviewOpen for Public Comments or by using the search function. Comments are welcome and must be received by February 7, 2022.
In accordance with the requirements of the PRA and its implementing regulations, 5 CFR part 1320, the following details concerning the collections of information are presented to assist those persons wishing to comment.
As noted above, the primary cost for entities associated with the proposed rule would result from the requirement that reporting companies must file a BOI
report with FinCEN, and update those reports as appropriate. FinCEN has also estimated costs that may be incurred related to individuals who may choose to apply for a FinCEN identifier, and related to foreign pooled investment vehicles that would need to submit a report to FinCEN, as well as the costs that would be incurred to update the information contained in those applications and reports.
i. Filing BOI Reports There are three factors that FinCEN
has considered in estimating the number of reporting companies that would file BOI reports under the rule, all of which contain uncertainty: 1 The total number of entities that could be reporting companies i.e., estimating the total number of corporations, limited 206 See
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liability companies, and other entities;
2 how many of those entities would be exempt from the definition of a reporting company i.e., removing from the estimates of total number of entities those that are estimated to satisfy relevant exemptions; and 3 how often those entities that meet the definition of reporting company would need to update their initial reports.207 FinCEN
welcomes comments on all aspects of this analysis.
a. Total Number of Entities That Could be Reporting Companies The first step in this analysis is for FinCEN to estimate the number of domestic entities, regardless of the entity type,208 that are in existence at the effective date of the regulation and that are newly created each year. As noted above, FinCEN assumes that the number of new entities each year equals the number of dissolved entities.
FinCEN also must estimate the number of foreign entities already registered to do business in one or more jurisdictions within the United States at the effective date of the regulation and the number that are newly registered each year.
FinCEN also assumes that the number of new foreign registered businesses is balanced by the number of existing foreign registered businesses that terminate. FinCEN does not have definitive counts of these entities but has identified information from the following sources as relevant to its initial estimates; none of this 207 FinCEN recognizes that reporting companies may also dissolve annually, but FinCEN assumes that the number of entities created and dissolved each year is roughly the same, and therefore the number of overall reporting companies is not likely to vary greatly year-to-year. This assumption is supported by Figure 3 of the SBAs Office of Advocacy 2020 Small Business Profile Report See U.S. Small Business Administration Office of Advocacy, 2020 Small Business Profile, 2020
available at https cdn.advocacy.sba.gov/wpcontent/uploads/2020/06/04144224/2020-SmallBusiness-Economic-Profile-US.pdf, which shows very little change, on average, to the net entity count. And in the instances in time that observe a large change in growth, there is an opposite and roughly equal in magnitude growth change in the immediately subsequent time period. FinCEN does account for an annual number of initial reports from newly created reporting companies in its estimates but assumes that each new entity is balanced by a reporting company which dissolves in the overall count of reporting companies.
208 While the proposed definition of domestic reporting company is any entity that is a corporation, limited liability corporation, or other entity that is created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian Tribe, FinCEN is not limiting its estimate of domestic entities to specific entity types or to entities that are created by such a filing. This simplifies the analysis but may produce overall estimates of costs that exceed the actual costs.

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