Sep 17, 201912:15 PMOpen Mic
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The Corporate Transparency Act: A data compliance nightmare for small business
Wisconsin small business owners are used to shouldering the burden of one-size-fits-all government regulations. However, our lawmakers’ most recent attempt will inflict a whole new level of pain on thousands of Wisconsin small businesses. Congress is getting ready to vote on the bill, called the Corporate Transparency Act, and it has consequences that some small businesses may not recover from.
The legislation is meant to stop criminals from exploiting our economy. Supporters say it will help the government catch bad guys like terrorists and criminals who use small businesses to launder money. Those supporters add that requiring all small business owners to file reports about their personal information would make it easier to investigate. Nothing wrong with that, right?
Wrong, say Wisconsin’s small businesses. At least 80 percent of National Federation of Independent Business members think it’s a bad idea. Companies with 20 or fewer employees would be required to report to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) — including sensitive personal information — on a regular basis. If they mess it up in any way, they have to pay up to $10,000, go to prison for three years, or both.
Here’s what this bill fails to consider: small businesses aren’t the same as big corporations. They don’t have teams of lawyers to fill out stacks of government documents and federal regulations. At most small businesses, the person who shoulders most of the work is the owner — the same person who gets up at 3 a.m. to start baking bread and stays well past close to lock up the doors. That’s why legislation often exempts small business from complicated government regulations. This bill is overreaching and intrusive. It would create a mountain of paperwork for small business owners who are concerned the legislation is a violation of privacy.
This is a well-justified fear. The Corporate Transparency Act would give the government broad access to personal information that could be used by law enforcement for just about any reason. There’s also the risk of that personal data being misused or stolen by hackers.
These are the kind of concerns that Congress needs to hear. However, lawmakers didn’t talk to a single small business before they wrote this bill. The result is that it takes transparency way too far.
Before Wisconsin’s congressional delegation votes on the legislation, they and the public need to know the true consequences of the Corporate Transparency Act. Not only is it a threat to the privacy of over 400,000 small business owners and their employees in Wisconsin, it imposes intrusive and time-consuming regulations that could force your local mom-and-pop shop to shut down. Congress should be looking for ways to cut red tape, not add to it. Rather than blindly move forward with this bill, I’m asking our senators and representatives to drop it before it has disastrous consequences for hard-working and job-creating small business owners across the state.
Bill G. Smith is the state director of the National Federation of Independent Business (NFIB), an association with thousands of small business members in Wisconsin.
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