Even in a small business-friendly environment, lawmakers still find ways to slow economic growth. This month, Congress is considering the Corporate Transparency Act of 2019, which would require that businesses file even more paperwork with the federal government and raises significant privacy concerns.
The current legislation would require that nearly every small business with fewer than 20 employees collect information and file reports with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on all owners of the business. This information would have to be updated annually.
Failure to comply with this legislation would be a federal crime. As it’s written, businesses could face steep civil fines of up to $10,000, and even criminal penalties of up to three years in prison.
Equally concerning is the potential for a massive breach of privacy. This new legislation would grant broad access to personal information that could be used by federal, state, local, or tribal law enforcement agencies for just about any reason — and without a subpoena.
The Corporate Transparency Act presents a real threat to more than 5 million small businesses in America. Unlike large companies that have teams of lawyers, compliance consultants, and accountants, most small businesses handle their financial paperwork and record-keeping on their own – and this is simply more time and resources most small businesses can’t afford. Out of 75 issues, NFIB members rank federal paperwork as the 12th biggest problem they encounter.