South Iowa News

U.S. Representative Zach Nunn of Iowa has introduced a bipartisan bill aimed at easing the paperwork burden on small businesses. The Protect Small Business from Excessive Paperwork Act, co-sponsored by Representatives Yadira Caraveo, French Hill, and Sharice Davids, seeks to simplify compliance with federal law and reporting requirements for these businesses.

“Iowa’s economy is driven by small businesses – more than half of Iowans are employed by Main Street,” stated Rep. Nunn. He emphasized the need to reduce unnecessary regulations while maintaining legal compliance.

The Corporate Transparency Act, passed in 2020, established new beneficial ownership information (BOI) reporting requirements to combat illicit shell companies. However, many small businesses were not informed about these changes. A survey by the National Federation of Independent Businesses found that 80% of its members were unaware of the new requirements.

Rep. Caraveo expressed concerns about the lack of accessible information regarding these requirements and supported extending the deadline for compliance by one year through this new legislation. “These requirements are critical to tackling money laundering, tax fraud, and financing of terrorism," she said.

During a roundtable hosted by Rep. Nunn in Des Moines with FinCEN Director Gacki, it was revealed that only 2 million out of approximately 32.6 million small businesses had submitted their reports.

“Small businesses across America need more time to learn about FinCEN’s costly and burdensome beneficial ownership reporting requirement,” said Rep. Hill, advocating for an extension to allow business owners more time to comply without facing severe penalties.

Despite low compliance rates under current rules, FinCEN has not extended the deadline. This leaves many business owners vulnerable to fines and potential jail time if they fail to meet requirements costing them nearly $8,000 on average according to the National Small Business Association.

Rep. Davids highlighted that "small businesses are the backbone of our economy," emphasizing policies should support rather than penalize them.

Todd McCracken from the National Small Business Association praised this legislative effort as a crucial step towards alleviating burdens on small companies and avoiding harsh penalties.

Tom Sullivan from the U.S. Chamber commended Reps Nunn and Caraveo for their initiative stating that additional time is necessary for both FinCEN and business communities before enforcing compliance with existing laws come January 1st next year.

The proposed bill extends filing deadlines until December 31st, 2025 allowing more time for Treasury Department education efforts on these complex regulations ensuring clearer guidelines are established moving forward.