The D.C. swamp strikes again with another regulatory shot at small business owners like myself. The Corporate Transparency Act is a new regulation that wraps us up with more red tape like a poorly wrapped Christmas present.
Tucked away in the National Defense Authorization Act of 2020, a new law was cast by the keepers of Big Government as a way to combat money launderers and drug dealers.
The act requires small businesses with less than 20 employees and $5 million in revenue to disclose details about beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network, and failure to comply can result in up to two years in prison and a $10,000 fine.
Our Tulsa based business is bigger than the thresholds in this law, but our banking and financial partners are all trying to make sure they and their customers are in compliance, so we are being asked to make these disclosures several times.
Who really believes that asking small business owners to provide their ownership details—whether accurate or fake—will stop money launderers or drug dealers from breaking the law? It’s like asking a bank robber, “Can you please fill out this form with fake information and promise not to rob the bank?” This kind of thinking could only come from Congress, where common sense seems to take a backseat.
But for those of us who obey the law and run ethical businesses, we get stuck with more time-wasting paperwork and the forced disclosure of private information. We already have numerous other compliance procedures to prevent money laundering activity and doing business with drug dealers.
Fortunately, this stupid law is tied up in the courts and on hold in some federal jurisdictions, but it’s still alive in others. Republicans in Congress should move swiftly to kill the Corporate Transparency Act.