DES MOINES — U.S. Representative Zach Nunn (IA-03) today introduced a bipartisan bill to reduce excessive paperwork for small businesses. The Protect Small Business from Excessive Paperwork Act, co-led by U.S. Representatives Tom Emmer (MN-06), Sharice Davids (KS-03), and Don Davis (NC-01), will make it easier for Main Street businesses to comply with federal law and reporting requirements.
“Iowa’s economy is driven by small businesses – more than half of Iowans are employed by Main Street,” said Rep. Nunn. “Bureaucrats in D.C. sit in their ivory towers, demanding businesses comply with onerous red tape, without considering the burden it puts on businesses. We must do everything we can to roll back unnecessary regulations and simplify requirements for job creators while still following the law.”
In 2020, Congress passed the Corporate Transparency Act to establish new beneficial ownership information (BOI) 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), 80% of NFIB members had never heard of the new reporting requirements. Complicating matters further, according to the National Small Business Association (NSBA), the average small business owner will spend nearly $8,000 to comply with these new reporting requirements in the first year alone.
“Small businesses are the backbone of our economy, and we should create policies that support them, not penalize them,” said Rep. Davids. “This bipartisan bill would give these business owners the time they need to comply with new regulations, allowing them to focus on what they do best – driving innovation and growth in our communities. I’m glad to work across the aisle with Representative Nunn in this effort.”
Rep. Nunn hosted FinCEN Director Gacki in Des Moines on May 31, 2024, to host a small business roundtable to discuss the new BOI requirements. During the event, Director Gacki reported that only 2 million out of approximately 32.6 million small businesses had filed their reports.
“Small businesses in Minnesota and across the country desperately need clarity on FinCEN’s complicated and costly beneficial ownership reporting requirements,” said Rep. Emmer, Majority Whip. “We are proud to support this legislation that will give entrepreneurs in Minnesota the time and transparency they need to comply and continue doing what they do best: driving our economy forward.”
Despite the lack of filings under the new requirements, FinCEN has refused to extend the deadline. As of January 1, 2025, millions of small business owners now face a daily fine of up to $591 and up to two years in jail.
“Small businesses are the backbone of our economy and should not be burdened with unnecessary paperwork,” said Rep. Davis. “The Protect Small Business from Excessive Paperwork Act provides small business owners the time and clarity they need to meet new reporting requirements without incurring penalties.”
On January 23, 2025, the U.S. Supreme Court declined to block the enforcement of these filing requirements. Now, small businesses across the country are expected to comply immediately or face harsh penalties.
“On behalf of NSBA’s 65,000 members, I applaud Rep. Nunn’s continuing leadership on the Corporate Transparency Act and implore lawmakers to support this bill and pass it as quickly as possible,” said NSBA President and CEO Todd McCracken. “America’s small-business owners have been on an unwelcome roller-coaster ride with the various lawsuits across the country, wondering when and whether they need to comply. I cannot stress how important some kind of certainty is on filing these Beneficial Ownership Information reports, and Congressman Nunn’s bill would do exactly that.”
“Very few small business owners know about the Corporate Transparency Act and even fewer employers have heard of FinCEN, the Treasury Department’s enforcement agency that wants small businesses to file Beneficial Ownership Information reports proving their businesses are legitimate,” said Tom Sullivan, Vice President for Small Business Policy, U.S. Chamber of Commerce. “The U.S. Chamber of Commerce applauds Representatives Nunn and Davids for their bipartisan introduction of the Protect Small Business from Excessive Paperwork Act which will give small businesses an additional year to learn about the law.”
The bipartisan Protect Small Business from Excessive Paperwork Act extends the filing deadline until January 1, 2026, for small businesses while the Treasury Department educates businesses on the new reporting requirements and ensures small businesses are not overburdened with unclear and unnecessarily complicated new regulations.
Text of the bill can be found here.
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