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Millions of small-business owners, including those running LLCs and S corporations, face looming financial penalties and even jail time due to the Corporate Transparency Act Beneficial Ownership Information rule, also known as CTA BOI. With the January 1 deadline approaching, Congress must act now by passing one of the proposed delay bills, or Donald Trump must pledge that his administration will not enforce fines for noncompliance.

What is the CTA BOI rule, and what’s the problem?

As Glenn Beck and I have discussed this past year, the Financial Crimes Enforcement Network, a division of the Treasury Department, issued the CTA BOI rule, which requires businesses to report personal information about all owners and decision-makers. This includes submitting a photo ID, such as a driver’s license or passport, for each person. The stated goal of the rule is to combat cartels, terrorism, and money laundering. However, this reasoning is deeply flawed. Criminal organizations are unlikely to voluntarily register their businesses, leaving law-abiding small businesses to shoulder the compliance burden.

Large businesses are exempt from this rule, meaning small businesses and other entities, such as certain housing associations, bear the brunt of the regulation. The penalties for noncompliance are excessive, including daily fines exceeding $500 and potential jail time. Additionally, the rule requires businesses to submit sensitive personal data, creating a cybersecurity risk if hackers target the database.

Congress has failed to act decisively

Despite at least 10 pending lawsuits challenging the rule’s constitutionality, including one where a federal district court declared it unconstitutional, Congress has not taken definitive action. Multiple delay bills have been introduced in both the House and Senate, yet none have moved forward. A recent report estimated compliance rates at just 10%, meaning millions of small businesses could face penalties under an unconstitutional rule.

Small-business owners are not financial criminals. They are the backbone of the American economy and deserve better treatment. This rule unfairly targets them, and Congress or President-elect Trump must take immediate action to protect these businesses.

What needs to happen?

Congress must pass a delay bill before the January 1 deadline. Alternatively, President-elect Trump could reassure small-business owners that his administration will not enforce the fines, giving them much-needed breathing room. This would allow time to overturn the rule entirely in 2025.

Last week, 44 members of Congress sent a letter to FinCEN requesting a delay, but more concrete action is necessary. Small businesses need clear communication and protection from this onerous regulation.

What can you do?

Call your representatives and spread the word on social media. Urge Congress and the Trump administration to take swift action. Small businesses need support, not unnecessary barriers, to thrive. Let’s prioritize empowering the American entrepreneurial spirit and protecting the backbone of our economy.