Small business owners across the nation are facing an unfair burden as they grapple with new reporting requirements imposed by the Corporate Transparency Act's Beneficial Ownership Information (CTA BOI) rule. This rule mandates small businesses to disclose sensitive personal information to FinCEN, the Treasury's Financial Crimes Enforcement Network division, and exempts large businesses, creating a discriminatory burden on small enterprises.
As a small business expert and owner, I have witnessed firsthand the struggles faced by small businesses in the face of the Corporate Transparency Act's Beneficial Ownership Information (CTA BOI) rule. This rule, implemented with the intention of combating financial crimes, has unfairly targeted small businesses by requiring them to disclose sensitive personal information to FinCEN, while exempting large businesses with at least 20 employees and $5 million in revenue.
This discriminatory approach has placed an undue burden on small businesses, which are the backbone of the American economy. Small businesses are not shell companies; they are the driving force behind innovation and job creation. Yet, the CTA BOI rule treats them as if they are potential criminals, assuming guilt without allowing for due process.
The information sought by FinCEN includes a photo identification for every owner and "important decision-maker" in the business. This invasion of privacy is not only excessive but also exposes small business owners to fraud and privacy violations.
Furthermore, the penalties for non-compliance are severe, including both civil and criminal sanctions with potential jail time. This is an egregious response that disregards the challenges faced by small business owners, who are already struggling with the aftermath of the COVID-19 pandemic and other economic headwinds.
The CTA BOI rule not only violates the privacy rights of small business owners but also contradicts the fundamental principles of fairness and equality. Large businesses are exempt from these reporting requirements, creating a disparity that undermines the competitive landscape.
It is no surprise that small business owners are considering dissolving their limited liability companies (LLCs) to escape this unfair targeting. However, this would expose them to increased liabilities and other risks.
The government should be supporting small businesses, not treating them like criminals. This rule is a barrier to their success and must be immediately overturned. The ends do not justify the means, especially when it comes to infringing on the rights of American citizens.
FinCEN has many tools at its disposal, including the court system, to combat financial crimes. They should utilize these resources instead of harming millions of small businesses in the process.
Congress, which enacted this rule, has a responsibility to correct this injustice. Senators Tuberville and Davidson are introducing the "Repealing Big Brother Overreach Act" to overturn the CTA BOI rule. Small businesses need the support of all elected officials to create a more equitable and supportive environment.
The time for action is now. Congress must immediately overturn the CTA BOI rule and protect the rights of small business owners.
