By NAHB
NAHB joined a coalition of business groups in filing an amicus brief in National Small Business United, et al. v. U.S. Department of Treasury, et al., challenging the constitutionality of the recently enacted Beneficial Ownership Information Reporting Rule under the Corporate Transparency Act.
On Jan. 1, new business reporting requirements were imposed under the Corporate Transparency Act (CTA) by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). The CTA was designed to provide law enforcement agencies with business information for the purpose of detecting and preventing illicit activity, including tax fraud, money laundering and financing for terrorism activities.
Although well intentioned, the new rule is onerous. Most U.S. small businesses (corporations, LLCs, limited partnerships) incorporated prior to the rule’s enactment have one year to file highly personal “Beneficial Owner” information with FinCEN, including full names, dates of birth, home addresses, Social Security numbers, and picture proof of the disclosed information. Small business entities incorporated on or after Jan. 1, 2024, have 90 days to make the required filings.
In a March 1 ruling, the Northern District Court of Alabama found the CTA unconstitutional on the grounds that it exceeds the constitutional limits placed on congressional powers. The Department of Treasury has been enjoined from enforcing the CTA against plaintiffs in the case.
