Apr 15, 2024 | Press Releases

Nunn Introduces Bipartisan Bill to Cut Red Tape for Small Businesses

DES MOINES — U.S. Representative Zach Nunn (IA-03) today introduced bipartisan legislation to relieve burdensome red tape on small businesses. The Small Business Red Tape Relief Act, which is co-led by U.S. Representative Henry Cuellar (TX-28), will hold the U.S. Treasury accountable for educating Main Street businesses on reporting responsibilities to prevent small businesses from being penalized for not complying with new requirements when they have not even been informed.  
“Small businesses are the backbone of Iowa’s economy – Main Street businesses in Iowa employ nearly half of all workers in our state,” said Rep. Nunn. “These businesses are drowning in bureaucratic red tape – making it harder every single day for these businesses to turn the key in the door. It’s even harder for a business to comply with reporting requirements when they haven’t been informed. This is a commonsense solution to help roll back the bureaucratic paperwork and reduce the burden on small businesses.” 
There are more than 270,000 small businesses in Iowa, accounting for 99.2% of all businesses in the state. Iowa small businesses employ nearly half of the workers in the state. Last year alone, 80% of new jobs added in Iowa were created by small businesses. 
“FinCEN’s new reporting requirements add another layer of bureaucratic red tape for more than 32 million small businesses. I am concerned by the agency’s failure to communicate these new requirements to small business owners,” said Rep. Cuellar. “I’m pleased to introduce the Small Business Red Tape Relief Actalongside Congressman Nunn, which would hold FinCEN accountable and ensure that small businesses are not responsible for requirements they have not been appropriately informed of. I will keep fighting for Main Street, so every member of our community can thrive.”  
In 2020, Congress passed the Corporate Transparency Act to establish new ownership reporting requirements for businesses to root out nefarious shell companies operated by foreign adversaries. However, during implementation, the U.S. Department of Treasury Financial Crimes Enforcement Network (FinCEN) failed to notify small businesses of the new reporting requirements. According to a survey by the National Federation of Independent Businesses (NFIB), 90% of NFIB members had never heard of the new reporting requirements.  
Despite millions of small businesses on the hook to comply with new filing obligations, FinCEN’s failure to educate resulted in a measly 400,000 filings in the first month – a drop in the bucket given the agency refuses to expand the deadline from 12 to 24 months. Non-compliance can carry significant criminal and civil penalties, including imprisonment and fines of up to $591 daily for each violation. 
“America’s more than 33 million small businesses are the backbone of our economy from the smallest towns to the biggest cities, employing roughly half of all private sector workers,” said National Association of Small Businesses President & CEO, Todd McCracken. “An estimated 5.5 million new entities are formed every year, meaning that this year alone, millions of BOI reports will have to be filed. The last thing an emerging entrepreneur needs is a bureaucratic headache. If the government threatens punitive enforcement action and insists on collecting personal data on millions of Americans, we should demand transparency. We are heartened to see Congress is taking this issue seriously, and we urge legislators to support Representative Nunn’s Small Business Red Tape Relief Act of 2024.” 
The bipartisan Small Business Red Tape Relief Act of 2024 will require the U.S. Department of Treasury to improve education to small businesses on the required reporting and submit quarter accountability reports to Congress with the number of businesses fulfilling the required reporting.  
Text of the bill can be found here