1819 News recently published NFIB State Director Rosemary Elebash’s guest column on why Congress needs to fully repeal the Corporate Transparency Act.

You can’t stop criminals by politely asking them to turn themselves in, but that’s basically what Congress tried to do with a law called the Corporate Transparency Act.

The idea behind the law was to catch criminals who use businesses to hide money from illegal activities. Instead of going after the bad guys directly, though, Congress required every small business to report who owns a part of, or in some cases works for the company.

This may sound simple, but it’s actually a significant issue for small business owners. It creates significant new paperwork burdens and red tape while likely doing very little to stop real criminals. As of the end of last year, only about 11 million of the 32.6 million affected businesses had complied with the law, indicating the complexity of the rule and the chaotic nature of its rollout. The mandate also exposes them to the potential of identity theft and threatens them with fines and even prison if they forget to file or update the forms.

Thankfully, small businesses recently got a break. President Trump called this onerous mandate an “economic menace” and then exempted U.S. small businesses from the reporting rule, at least for now. This was a good move, but it doesn’t solve the problem as the rule is still on the books, and legislation creating it hasn’t been repealed. A future president or administration could easily start enforcing it again. That means more than 32 million small businesses—including over 450,000 here in Alabama—could face these burdens all over again.

Frankly, this is a misguided law full of nonsense. Small business owners could face fines up to $10,000 or even two years in prison if they forget to file or update these reports with the U.S. Treasury. Every time ownership changes, even a little, they’d have to update their forms again.

Experts say that following this rule could cost America’s small businesses over $73 billion in the next decade. That’s a huge price to pay, especially when many small businesses are already struggling to hire and grow.

The database is accessible to local, state, federal and even foreign agencies, without a warrant or subpoena, creating a serious privacy nightmare. And what if hackers break into the government’s system and steal all that personal information? It’s happened before. This law could actually put business owners at more risk, not less.

This is just one more example of Washington making decisions that hurt small businesses. The law was quietly passed in 2021 as part of a bigger bill. And it mostly affects small businesses. Companies with more than 20 employees don’t have to follow it. That means bigger companies get a pass—and some criminals could even avoid the law by hiring a few more people.

My association, the National Federation of Independent Business (NFIB), is still working hard to fight this law in Congress and in court. We want it gone for good.

Small business owners already deal with enough stress. They shouldn’t have to worry about filing reams of paperwork just to avoid breaking a law that doesn’t even stop crime. And if the law comes back, they’ll have to go through the same painful process every time something changes.

There’s nothing “beneficial” about this rule. If Congress really wants to help small businesses, it should get rid of the Corporate Transparency Act once and for all. Temporary relief is good, but permanent protection is what small businesses truly need.