Relief for Small Businesses: The Fight Against Overburdensome Reporting Requirements under the Corporate Transparency Act

The Corporate Transparency Act (CTA) has put an enormous burden on small businesses, with its onerous reporting requirements. Now, legislation has been introduced to ease these requirements specifically targeting the CTA. The National Federation of Independent Business (NFIB) supports this bill, which was presented by Sen. Tommy Tuberville and Rep. Warren Davidson. Repealing the CTA would eliminate the beneficial ownership information requirements that have been considered one of the most challenging regulations affecting small businesses.

According to NFIB Vice President of Federal Government Relations, Jeff Brabant, the Corporate Transparency Act imposes significant burdens on small business owners by subjecting them to civil and criminal penalties for minor paperwork violations. Additionally, it grants law enforcement agencies access to a vast database containing the private information of millions of small business owners. NFIB believes that the CTA is beyond repair and fully supports the repeal efforts led by Sen. Tuberville and Rep. Davidson.

Under the CTA, corporations, LLCs, or similar entities with 20 or fewer employees and $5 million or less in gross receipts are required to report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). This rule went into effect on January 1, 2024, and is estimated to impact 32.6 million small businesses in the first year, with an ongoing impact on five to six million small businesses each year thereafter. NFIB has actively opposed the Corporate Transparency Act and is advocating for its repeal to alleviate the regulatory burden on small businesses.

Small business owners should not be subjected to such burdensome reporting requirements that can lead to significant penalties and granting law enforcement access to sensitive data without proper protection mechanisms in place. The repeal of the Corporate Transparency Act will provide much-needed relief for small businesses across America who are struggling under its weighty burden.