Lawmakers snuck the Corporate Transparency Act into the 1,480-page National Defense Authorization Act in 2021.
The measure is targeted squarely at small businesses with fewer than 20 employees or $5 million or less in gross receipts. Companies larger than this are exempt.
The Corporate Transparency Act also exempts companies in many lines of business (banks, broker-dealers, utilities, accounting firms) that are vastly more able to abuse the financial system than are the targeted Main Street businesses. It affects approximately 11 million small businesses and will impose costs exceeding $1 billion annually.
The Corporate Transparency Act requires these businesses to report their beneficial ownership to the Financial Crimes Enforcement Network at the Treasury Department.
A serious problem, however, is that the law doesn’t define ownership as actual ownership but as…
