Washington (AP) – Supreme Court Thursday revived a requirement that owners of millions of small businesses register with an arm of the Treasury Department charged with combating money laundering and other financial crimes.
The justices granted an emergency plea argued by the Justice Department in the waning days of the Biden administration to allow enforcement of the Corporate Transparency Act, enacted in 2021 to crack down on illicit use of corporations anonymous screensavers.
Owners and partial owners of approximately 32.6 million small businesses must register personal information with Treasury’s Financial Crimes Enforcement Network, or FinCEN. The information includes photo IDs and household addresses.
It is unclear whether the Trump administration will devote much effort to enforcing the registration requirement, which has been opposite by Republican-led states and legislators, as well as conservative and business interest groups.
The registration requirement was blocked by a federal judge in Texas, who ruled that Congress did not have the authority to pass the corporate transparency law in the first place. He was suspended by a panel of the 5th U.S. Circuit Court of Appeals pending its review of the judge’s decision.
The Supreme Court’s action allows the registration requirement to stand while the Texas case meanders through the courts.
The National Small Business Association, which Earlier challenges to reporting requirements in courturged Fincen to give businesses enough time to comply with the requirement.
“This decision creates even more uncertainty for the millions of small businesses we represent,” said Todd McCracken, NSBA president and CEO. “I cannot stress enough what a major problem this back-and-forth is and the massive uncertainty it is creating for the millions of small businesses across this country.”
He called on Congress to delay and repeal the CTA.
Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, said the order likely isn’t the end of the “go-go story” of the benchmark requirement.
“At this point and with the cloud of uncertainty still hanging over the legality of the CTA, we urge President Trump to step in and relieve immediate penalties for late filers, of which millions of small business owners likely are,” she declared. “The CTA’s confusion and chaos continues, and Congress really needs to step up and repeal the mandate.”
A coalition of labor, environmental and other progressive organizations that support the law praised the court for paving the way for its implementation.
“For years, police and prosecutors have tried to combat a flood of dirty money associated with often violent crimes, but that can’t happen if they run into a wall of shell companies and secrecy Ian Gary, executive director of the Facts Coalition, said in a statement. “Today’s order is a reminder of the urgency of opening the money trail so our law enforcement officials can crack down on criminals who abuse the system.”
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