NFIB sends recommendations to Treasury on proposed rules
WASHINGTON, D.C. (Jan. 26, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, sent a letter to the U.S. Department of Treasury concerning the proposed rulemaking titled “Beneficial Ownership Information Reporting Requirements.”
“The beneficial ownership reporting requirement proposed rules from the Treasury Department and Financial Crimes Enforcement Network (FinCEN) are a significant concern for small business owners,” said Kevin Kuhlman, NFIB Vice President of Federal Government Relations. “The proposed rules will further challenge struggling small businesses with new paperwork requirements and will create a first of its kind federal registry of small business owners, which is a privacy concern for many. The proposed regulations overreach on who must file, when they must file, and what information they must provide. Treasury and FinCEN propose to expand the definition of beneficial owner beyond the statute and previous regulations; propose insufficient time for small business owners to file and update reports; and propose small business owners report more personal information than Congress intended. At the same time, Treasury and FinCEN fail to clarify exactly which types of businesses must file, ultimately resulting in small businesses being forced to seek legal advice before filing paperwork. We urge the Treasury Department to adjust the rules and reduce the burden on small businesses, as the law requires.”
Treasury estimates the proposed rules to implement the Corporate Transparency Act will require more than 25 million existing small businesses to spend an aggregate of $4 billion to submit reports on their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).
NFIB opposed the Corporate Transparency Act, which requires corporations and limited liability companies (LLCs) with 20 or fewer full-time employees to file new reports with the Treasury Department’s FinCEN bureau containing the personally identifiable information of small business owners and update that information periodically.
NFIB recommends the following adjustments:
- FinCEN should give the public the opportunity to comment contemporaneously on the rules for FinCEN collection of BOI and FinCEN safeguarding of BOI, and the safeguarding rules should take effect before FinCEN collects BOI.
- FinCEN should lengthen the deadlines for small businesses to report BOI to FinCEN.
- FinCEN should recognize that small businesses cannot report changes to FinCEN until they become aware of the changes.
- FinCEN should recognize that reporting companies can only certify accuracy and completeness of reports to the extent of their knowledge.
- FinCEN lacks authority to seek or compel provision of more BOI than the law specifies.
- FinCEN should tailor the list of officers presumed to have substantial control of a reporting company.
- FinCEN should emphasize assistance-with-compliance over punishment-through-enforcement in administrating the BOI regime.
- FinCEN should state clearly that exempt entities and sole proprietors have no BOI reporting duties.
- The President, the Secretary of the Treasury, and the Director of National Intelligence should apply to FinCEN, as an agency focused on collection of massive amounts of intelligence on American citizens, the safeguards that apply to other U.S. intelligence agencies.