Corporate Transparency Act Threatens Privacy for Small Businesses
ELMORE CITY, OK (November 26, 2024) — The Corporate Transparency Act, which takes full effect on January 1, 2025, requires new reporting for America’s small business that threatens basic principles of privacy.
Enacted January 1, 2021, when Congress overrode President Trump's veto, the law requires small businesses to report to the Financial Crimes Enforcement Network (FinCEN), personal information of individuals that beneficially own at least 25%.
With limited exceptions, small businesses with 20 or less employees (or $5 million or less in annual revenue) must report to FinCEN the name, address, date of birth, and valid photo I.D. of each beneficial owner (owning at least 25%). Failure to comply by January 1, 2025, can result in fines of up to $10,000 and prison sentences of up to 2 years.
This unprecedented move will create a comprehensive database containing the identifying information of American small business owners. All Federal agencies with law enforcement and security functions have quick access to this FinCEN database of small business owners. Banks and regulators have full access. Even foreign governments have easy access to this small business database if under an existing treaty or upon an “official request.”
Because of the minimal barriers to gain access to this small business owner database, there is a significant possibility for abuse. In an interview with Michael Wilson, host of The Lone Star Conservative morning radio show on Patriot Talk 920 AM (Houston), Old Glory Bank CEO Mike Ring cautioned about the scope of the Corporate Transparency Act.
“What’s really disturbing about this one, and it’s not an accident, is they have created a system where foreign governments can easily access this upon request with one of their friends at the federal agencies,” said Ring. “So now, the entire world, including potential bad actors at foreign governments, will know who owns what little small business.”
With few exceptions, this new law targets small businesses with 20 or less full-time employees or annual revenue of $5 million or less. “80 percent of all small businesses have less than 20 employees or less than $5 million in revenue,” said Ring.
Exempt companies include investment companies, investment advisors, banks, broker-dealers, insurance companies, political organizations, tax-exempt charitable organizations, and dormant companies.
“They don’t trust the little guy,” said Ring. “They don’t trust middle America. And they want the names of the owners of our little businesses out there.”
“No money launderer, no sex trafficker, no terrorist is going to file with FinCEN and give the names of their bad actors,” said Ring. “So, the only people who are going to comply with this are the law-abiding citizens, and it is clearly an affront on our privacy.”
Ring is urging Americans to reach out to their congressperson and President Trump to bring the issue to the forefront of the national conversation.
“Once this database exists, it can’t be undone,” said Ring. “It’s not going back. So, we have a very limited time.”
Host Michael Wilson of Patriot Talk 920 emphasized the importance of Americans engaging in the fight against governmental violations of privacy. “While certainly it is going to be up to Congress and it is going to be up to the Treasury Secretary to fight these fights,” said Wilson, “the start is really going to be, ‘What are the people willing to do to fight for their right to privacy and to fight against the bureaucratic administrative state that is trying to violate those rights at every single turn?’”