Commentary by Bill Bullard, CEO, R-CALF USA
The Corporate Transparency Act would have required tens of millions of United States small businesses, such as limited liability companies (LLCs) with fewer than 20 employees and gross receipts less than $5 million annually, to report their private business information regarding their “beneficial owners” to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), which according to them, would then store this sensitive information in a secure, confidential database.
But a federal district court in Texas just issued a nationwide preliminary injunction, effectively blocking the government’s reporting requirement while the case is under review by the court.
What that means is that no one is currently required to comply with the January 1, 2025, reporting deadline unless the preliminary injunction is overturned or modified by a future court decision.
The U.S. Department of Treasury has appealed the Texas district court’s ruling, and the appellate court is expected to act relatively swiftly to either uphold the preliminary injunction, modify it, or overturn it.
So, this uncertainty means we need to monitor this closely because a swift reversal of the current preliminary injunction could mean the reinstatement of the January 1, 2025 reporting deadline.
If this were to occur, we’d hope the government would extend the reporting deadline, but there’s no way to know if it would. Therefore, businesses that were required to report before the preliminary injunction should be prepared to do so should the injunction be reversed.
In any event, our best advice is to keep listening to and watching the news.
Now what the Corporate Transparency Act purports to do is assist the U.S. Department of Treasury’s Financial Crimes Enforcement Network in protecting the U.S. and international financial systems, as well as people, from illicit financial threats like terrorist financing, drug trafficking, and money laundering.
And while this appears to be an admirable and important objective, it’s one that can and should be achieved through means that do not infringe upon the rights and privileges of tens of millions of hard-working, law-abiding business owners and that do not impose upon them yet another costly, unfunded mandate.
When R-CALF USA learned of the onerous reporting requirements targeting more than 30 million small businesses, including many cattle and sheep farms and ranches, we joined as co-plaintiffs in a lawsuit filed in the federal district court in the state of Utah that seeks to overturn the reporting requirement.
Specifically, we joined with several Utah-based individuals and LLCs, including Phillip Taylor; The People Restored LLC, Crofter Market LLC, and Utah OSR Land Cooperative. Our lawsuit was filed in late July, and we are eagerly awaiting the court’s review of our case.
There are now several lawsuits, including ours and the one in Texas, that have been filed against the Corporate Transparency Act’s reporting requirements. Presumably, all of these cases allege that the government has overreached and is violating the U.S. Constitution.
Our case does just this. We allege the Corporate Transparency Act is an unconstitutional privacy violation and an unconstitutional search and seizure. We allege it is a violation of the Commerce Clause because the mere act of owning a business is not interstate commerce. We allege the requirements of the Act represent a violation of the Fifth Amendment’s due process clause. We also allege it violates the First Amendment rights of speech and association and that it violates separation of powers.
One thing is certain: We’re in yet another David versus Goliath fight, a fight against a powerful opponent with deep pockets that can be unrelenting in its quest for control over private citizens and their property rights.
It seems these are the kinds of fights we engage in frequently to carry out our mission to protect and preserve our members’ constitutional rights, particularly their property rights, but also their right to participate in and be profitable in their cattle and sheep operations, free from the heavy hand of government and the heavy hand of global corporations.
And that’s why we find ourselves in so many lawsuits today: from our historic lawsuit alleging that the four largest beef packers have violated our nation’s antitrust laws and the Packers and Stockyards Act, to our lawsuit alleging that the U.S. Department of Agriculture (USDA) has overreached its statutory authority by mandating electronic identification eartags on cattle, to our lawsuit alleging the USDA violated its statutory obligations when it tried to correct its unconstitutional operation of the beef checkoff program, and to this lawsuit alleging the Corporate Transparency Act violates the constitutional rights of our cattle and sheep farmers and ranchers.
Now, and very importantly, there’s something you should do: Find an organization that best represents your values and interests and start supporting it!