Corporate Transparency Act Amendment Shoulders Small Businesses with New Regulatory Burdens and Privacy Concerns

Date: July 20, 2020

WASHINGTON, D.C. (July 20, 2020) — The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, issued the following statement from Vice President of Federal Government Relations Kevin Kuhlman in response to the United States House of Representatives’ passage of H. Res. 1053, the Rule to H.R. 6395, which is an NFIB Key Vote for the 116th Congress, consistent with NFIB’s opposition to the Corporate Transparency Act of 2019:

“Small businesses on America’s Main Streets are fighting to survive and recover amid the COVID-19 pandemic. This rule allows for consideration of the Corporate Transparency Act of 2019 as an amendment to the National Defense Authorization Act. According to NFIB research, this amendment, which is unrelated to the NDAA, would saddle America’s smallest businesses with 131.7 million new paperwork hours at a cost of $5.7 billion, at the same time treating small business owners as criminals, threatening them with jail time and oppressive fines for failure to provide completed or updated paperwork. Now is not the time to bury amendments that shoulder our country’s small businesses, which account for half of our U.S. economy and nearly half of jobs, with yet another onerous regulation. To make matters worse, this amendment also puts their personally identifiable information at serious risk. We are disappointed that the U.S. House of Representatives has moved this forward to consider this amendment with minimal debate and likely without a standalone vote, and we will continue our work to prevent this harmful and costly requirement from becoming law.”

NFIB sent a Key Vote letter to members of the U.S. House of Representatives. NFIB and nearly 50 other business groups have been meeting with lawmakers urging them to oppose the Corporate Transparency Act of 2019. They will continue their efforts to prevent this bill from being signed into law.

The Corporate Transparency Act of 2019 would require small businesses with 20 or fewer employees to complete and submit annual paperwork which includes the personally identifiable information of each business owner to the Treasury Department’s Financial Crimes Enforcement Network upon the creation of the business and periodically for the life of the business. Failure to comply would be a federal crime with civil penalties up to $10,000 and criminal penalties of up to three years in prison.

Millions of small businesses would be required to provide personal ownership information to FinCEN on an annual basis. The Treasury Department would be required to retain the information for the life of the business plus five years. Furthermore, the legislation grants broad access to the information to federal, state, local, or tribal law enforcement agencies without having to obtain a subpoena.

An NFIB study found that, under the Corporate Transparency Act of 2019, small businesses would face $5.7 billion in new regulatory costs and an additional 131.7 million hours of paperwork if the legislation is signed into law.

To read more on NFIB’s efforts to protect small business privacy, visit https://nfib.com/protectprivacy.

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