Congress to consider big concern for small business
A bill now being considered by federal lawmakers is intended to make it easier for police to track financial criminals who set up shell companies, but the legislation casts such a wide net, hundreds of thousands of innocent small business owners would also be negatively affected.
Under the Corporate Transparency Act, almost every company with fewer than 20 employees would have to routinely fill out stacks of forms on so-called beneficial owners, a confusing legal term. They would need to provide personal information like drivers’ licenses, passports, and more. Business owners who unintentionally make a mistake or fail to comply, would face up to three years in jail and $10,000 fines.
What’s worse, small business owners who would be subject to this sledgehammer of a law are exposed to a real potential for identity theft. The information collected under this act would create a huge database and be open to any police agency without a subpoena –even foreign governments could request it from the US Treasury’s Financial Crimes Enforcement Network. Putting all that personal data on small business owners in so many hands is a big concern, and it would remain in the system years after the business was sold or closed.
The name Corporate Transparency Act sounds innocent, but it’s giant government overreach. Our American criminal justice system isn’t meant to target anyone unless there is existing probable cause that a crime has been committed. This bill flies in the face of that.
The burden falls on the smallest of small businesses like auto repair shops, florists, and restaurants where the owners are working long workweeks to keep their daily operation going. They do the selling, the production, manage employees, and often handle the books. They don’t have accountants on staff or regulatory compliance officers to help navigate confusing federal regulations. They are already overwhelmed with paperwork.
When it comes right down to it, those running terror organizations, drug cartels, or money laundering operations aren’t likely to comply with the Corporate Transparency Act, so it doesn’t seem it would produce the intended results. Connecticut’s members of Congress should kill this bill.
Andrew Markowski is state director of NFIB in Connecticut, a small business association.
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