Rosemary Elebash: Small businesses dodged a bullet on new federal mandate, but the threat remains

You can’t stop criminals by politely asking them to turn themselves in, but that’s basically what Congress tried to do with a law called the Corporate Transparency Act.

The idea behind the law was to catch criminals who use businesses to hide money from illegal activities. Instead of going after the bad guys directly, though, Congress required every small business to report who owns a part of, or in some cases works for the company.

This may sound simple, but it’s actually a significant issue for small business owners. It creates significant new paperwork burdens and red tape while likely doing very little to stop real criminals. As of the end of last year, only about 11 million of the 32.6 million affected businesses had complied with the law, indicating the complexity of the rule and t