By Nicole Riley
Riley is the Virginia state director for NFIB, a small business advocacy association that represents thousands of members in the state.
Many Americans are worried about the amount of data now being collected about them and how it could be used to clone their identity, violate their privacy, or lead to fraud. A bill about to be considered by Congress would make almost every small business owner an easier target for identity thieves. The Corporate Transparency Act is a massive government overreach that would require the owners of businesses with less than 20 employees to report detailed private information to the federal government, like driver’s license numbers, passport information, dates of birth, and addresses, creating a huge database. Proponents claim the bill would help police agencies find criminals who set up shell companies to hide illegal activities. But to find a few bad guys, it turns hundreds of thousands of perfectly innocent business owners into potential victims of identity theft.
The information collected under this act would be available to any police agency without a subpoena, and even foreign governments could request it from the U.S. Treasury’s Financial Crimes Enforcement Network. Putting all that personal data of small business owners in so many hands is the scary part, and it would remain in the system years after a business was sold or closed.
While catching financial criminals or drug dealers is a laudable goal, why should the government need to throw such a wide net? Traditionally in our country under criminal law, probable cause of a crime is required before the police or government starts gathering information from private businesses. It seems un-American to do otherwise.
The detailed reporting requirements of this Act are also legally complex. For example, it requires personal data on part-owners if they benefit in certain ways from their investment. If a small business owner made mistakes, was unable to gather the data, or failed to comply, they could face fines up to ten thousand dollars and up to three years in jail!
Owners of smaller business are often chief cook and bottlewasher working way beyond 40 hours a week. Piling such a paperwork requirement on their shoulders is a huge burden. They would not be likely to have lawyers, accountants, or compliance officers on staff to help them comply. When NFIB surveyed its members asking them to rank the problems they face, filling out government paperwork ranked among the top 20.
As our state congressional delegation goes back to Washington D.C. this month, their constituents should encourage them to vote against the Corporate Transparency Act and the similar U.S. Senate bill. It will help the small business owners on every Main Street in Virginia breathe a sigh of relief.