1. Number of employees at a large operating company

A large operating company must employ more than 20 full time employees in the United States. In general, a full-time employee is, with respect to a calendar month, an employee who is employed an average of at least 30 hours of service per week with an employer.

Employee headcounts are done at the level of each individual LLC, corporation, or other entity. FinCEN declined to permit companies to consolidate employee headcount across affiliated entities. Thus, for example, parent companies cannot count employees of their subsidiaries, or vice versa.

2. A large operating company’s presence within the United States

A large operating company must have an operating presence at a physical office within the United States.

The term “has an operating presence at a physical office within the United States” means that the company regularly conducts its business at a physical location in the United States that it owns or leases and that is physically distinct from the place of business of any other unaffiliated entity.  (Although the final reporting rule itself is silent on the issue, it may be noted that FinCEN indicated in the Preamble to the final reporting rule that entities can qualify for this exemption if their physical presence in the United States consists exclusively of properties used as someone's residence.)

3. A large operating company’s gross receipts or sales

A large operating company must have filed a Federal income tax or information return in the United States for the previous year demonstrating more than $5 million in gross receipts or sales. This excludes gross receipts or sales from sources outside the United States.

For an entity that is part of an affiliated group of corporations within the meaning of 26 U.S.C. 1504 that filed a consolidated return, the applicable amount is the amount reported on the consolidated return for the group. (Note that while employee headcount cannot be consolidated among affiliates, gross receipts and sales can be consolidated.)  The entity must have reported this greater-than-$5 million amount as gross receipts or sales (net of returns and allowances) on the entity’s IRS Form 1120, consolidated IRS Form 1120, IRS Form 1120-S, IRS Form 1065, or other applicable IRS form.