Posted on 12/18/2023 3:45:19 PM PST by Twotone
Have you heard of the Corporate Transparency Act? Most of the estimated 32 million small business owners, including sole proprietors, whom the new law affects have not. It was just recently put on my radar by a handful of people — quite a shock for a measure that takes effect at the start of the new year!
A new reporting rule under the law means that businesses will need to file information with the Financial Crimes Enforcement Network (a bureau within the U.S. Department of Treasury), including personal information about the people who are associated with the business, or risk penalties for noncompliance. This is being done in the name of "fighting money laundering." Sure.
The law is another administrative hassle that adds to small business owners’ paperwork requirements and takes entrepreneurs away from more productive economic activities.
If you are not familiar with FinCEN, its mission is “to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.”
Of course, the law includes around 20 exemptions, such as publicly traded companies, U.S. operating companies with 20 or more full-time employees and $5 million in sales, and some others, which means that the burden of this rule falls primarily on small businesses, including solopreneurs (aka one-person entities).
While it is not uncommon for unsavory folks to use certain business structures to create shell corporations to launder money, actual instances of this are few and far between. This rule will impact tens of millions of law-abiding small businesses.
FinCEN estimates it will take three hours for initial compliance (but who knows, depending on if you have to track down the information they are asking for or if you have questions). Then you will be responsible for letting FinCEN know of any future updates and changes.
First, this is an unnecessary invasion of privacy for small businesses, creating a database filled with personal information. And it is hard to believe the law will do anything meaningful to stop money laundering or that the burden it generates will justify any possible small benefit to come from it. Not to mention the security risk of having yet another database full of information for cybercriminals and foreign adversaries to target.
Moreover, it is another administrative hassle that adds to small business owners’ paperwork requirements and takes entrepreneurs away from more productive economic activities.
Of course, there is also a fee of $85 to milk from the small businesses already burdened by this compliance — that is, if you understand what you are doing and don’t need to hire some type of adviser to assist you, which will cost you much more.
And, again, very few people even know about the law.
By the way, you can’t blame Joe Biden for this one. “The act falls under the scope of the Anti-Money Laundering Act of 2020 and was enacted as part of an expansive national defense authorization package on Jan. 1, 2021,” the Mississippi Business Journal reported. “The package passed through Congress with broad bipartisan support before being vetoed by then-President Donald J. Trump. Both houses of Congress voted to override the veto.”
As it appears you have a year for initial compliance if you are an existing small business (but only 30 days after creation if you are starting a new one), I am likely to wait until the back half of 2024 to see if the rule gets revised or postponed before I waste any of my valuable time on it.
But in the meantime, if you are a small business owner or service small businesses, put it on your radar and ask your legal and accounting advisers about it.
The government proves once again that it doesn’t care about small businesses but only about what gives government officials more power. Unfortunately, entrepreneurs have to pay the price.
The Deep State like big business only.
The end goal is government ownership of the means of production, or communism. This is a medium sized step towards their goal.
Was just talking about this with my friend from China (legal). She owned a business there and had similar experiences. The unannounced visits were the worse.
“Guilty until proven innocent.”
Just another plan by these slimy greaseballs to help kill American productivity. Whadda sorry bunch of commie arseholes. Just shut it all down and quit paying taxes to these low- life bassturds.
I’m not reading all that just to conclude biden’s handlers are screwing Americans again.
Lond winded article written by a non-writer.
Be consise and just explain it.
And if 30 million of the 32 million small businesses don’t comply, simply because they don’t know about it…what are they going to do, arrest 30 million people?
PFL
Not Biden. Written while Trump was in office, vetoed by Trump and overridden by the swamp.
So will this include the cartels or white collar criminals like Joke Biden? Since the govt is all about fighting money laundering, right?
Maybe it is time to shut down my small business.
It is quite possible they will let this be bypassed this year and wait until they steal the 2024 election.
Then enforce it.
Initially they will probably just use the law against any small business owners who might have ideas of running for office or serving on any candidates staff, advisory committee, etc.
He said if we wanted to fight, he could use F 15’s on us.
https://www.youtube.com/watch?v=VfJtsQwpMhQ
“what are they going to do, arrest 30 million people?”
Problem is most USA people think they need to obey the law.
That is a concept I gave up on when Obama was elected.
Any law passed by Democrats is BS to be ignored.
save your money and keep a lawyer on speed dial.
It wasn’t THAT long, & no, it wasn’t Biden screwing small business, it was congress. Trump vetoed the bill & they over-rode.
The Government doesn’t want or need to arrest anyone. They will just use a computer to send out letters with large fines and compounding penalties. If not addressed, it, well, compounds. Wouldn’t surprise me if it then rolled over to the IRS to encumber the business’ tax refunds. The government will eventually crush the noncompliance and put them out of business, which sounds like the point of the law.
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