Alabama Attorney General Steve Marshall and 21 other state attorneys general urged a federal appeals court on Monday to not revive a new controversial federal small business reporting requirement.
U.S. District Court of the Northern District of Alabama Judge Liles Burke in Huntsville granted summary judgment to the National Small Business Administration (NSBA) in its challenge of the constitutionality of the Corporate Transparency Act (CTA) in March. The Department of Justice appealed the ruling.
1819 News reported in January about a new requirement under the CTA whereby most Alabama small business owners would be required to share ownership information about their companies or risk being subject to civil and criminal financial penalties or imprisonment under the new federal law.
Although Burke sided with the NSBA in March, small businesses who aren’t NSBA members are still subject to the mandate since the lawsuit wasn’t a class action.
“As a practical matter, the CTA will harm the States and their residents—too much. Even the federal agency that enforces the CTA, the Financial Crimes Enforcement Network, or FinCEN, doesn’t say otherwise. FinCEN admits that in just the first two years after its implementing rule goes into effect, American small businesses will be forced to spend over 150 million hours and nearly $30 billion trying to comply with the CTA’s reporting requirements. And those estimates are likely far too low. The States will also face significant costs complying with their own requirements under the law in educating the regulated public and offering up sensitive data to FinCEN. All of this comes at the expense of our economies and the people who make them run,” Marshall and the 21 attorneys general said in an amicus brief.
U.S. Sen. Tommy Tuberville (R-Auburn) introduced the "Repealing Big Brother Overreach Act" to overturn the CTA in April due to the “massive administrative burden” the law would place on millions of American small business owners.
“The State Attorneys General amicus brief has caused a real stir. They complain not only about IRS/Congressional overreach, but argue that the CTA will punish small businesses financially and in terms of red tape and potential fines and criminal penalties and impose a burden on state governments as well. It’s kind of ironic that 22 states are arguing against the Act since the states were intended to be some of the major beneficiaries of all the personal information that FinCEN is supposed to collect and store,” Bruce Ely, a tax attorney and partner with the Bradley Arant Boult Cummings law firm, told 1819 News recently.
AGs amicus cta by Caleb Taylor on Scribd
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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