R-CALF USA has joined as a plaintiff in a joint lawsuit against the U.S. Department of the Treasury and others, challenging the constitutionality of the Corporate Transparency Act (CTA). The groups are seeking to prohibit enforcement of the CTA and an additional declaration of the CTA’s unconstitutional status in a Utah District Court.
Effective January 1, 2024, the CTA requires all state or tribal registered entities, including those with under 20 employees, such as limited liability companies (LLCs), to report private, sensitive information on “beneficiary owners” to the federal government, which will be stored in a database.
In the suit, the plaintiffs note that the CTA’s reporting obligations mainly apply to small business owners while many large corporations are exempt from reporting. The groups also outlined the harsh penalties for noncompliance, financial and legal burdens on small business owners, the federal overreach into states’ rights and regulations of business ownership and formation, and several constitutional violations.
R-CALF USA CEO Bill Bullard said that his group is seeking an injunction on behalf of its members for protection from what they consider an unconstitutional imposition on private information.
“This law was intended to identify those who already don’t follow the law when it comes to money laundering, terrorism funding, and other illicit financial activities,” said Bullard. “Rather than put money or time into law enforcement or detective work to find these alleged criminals, the government chose instead to place a significant burden on law-abiding small business owners.”
“The CTA is an egregious overuse of federal power that seeks to invade personal and private data of small business owners and their associates across America,” said R-CALF USA Property Rights Committee Chair Shad Sullivan. “Another blow to hard-working Americans who are the backbone of small communities across this nation.”
“An initial victory in what could be a protracted case would be the immediate granting of an injunction to prevent the federal government from enforcing the CTA against R-CALF USA members while the case makes its way through court,” Bullard said.