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Â鶹TV joined a coalition of business groups in filing an amicus brief in ., 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.

FinCEN has since issued a acknowledging that it will comply with the court’s injunction, but it continues to assert its authority to enforce the law against nonparties that fail to file the necessary Beneficial Owner disclosures remains intact. The Treasury Department then went on to appeal the ruling to the Eleventh Circuit. 

Â鶹TV — together with the National Federation of Independent Business, Associated General Contractors of America, and American Farm Bureau Federation — filed an amicus brief in support of Plaintiffs-Appellees on May 20. The brief focuses on Congress’ limited commerce clause authority to regulate the channels and instrumentalities of interstate commerce, and activities that have a substantial effect on interstate commerce. To exercise such power, the activity being regulated must be an economic activity. Because the CTA regulates the noneconomic activity of business incorporation, it is an unlawful exercise of Congress’ commerce clause authority.

A ruling in this case from the Eleventh Circuit is expected later this summer.