U.S. Sen. Chuck Grassley (R-IA)
Small business owners across Iowa are closely watching a set of bills working their way through Congress. Called the TITLE Act, and co-sponsored by U.S. Sen. Chuck Grassley (R-IA), the bill aims to make it harder for criminals or foreign entities to set up shell corporations in an effort to hide assets.
The law requires states to turn over corporate ownership information to authorities if a summons or subpoena is issued. It also creates some rules and regulations to prove a company is not being used to launder money.
Grassley said in a press release that shell companies are often used to dodge taxes or launder money.
“Anonymous shell corporations have long been used to conceal the identities of fraudsters, tax cheats and even foreign entities running afoul of the law,” Grassley said. “Greater transparency can prevent these abuses of our incorporation system.”
However, Tiffany Van Zante, whose family operates a third-generation trucking and warehouse company Geetings Inc. in Pella, says the law will put a huge burden on small business owners.
“When I look at what we are going to have to do to be able to file, to be compliant,” Van Zante said. “The amount of time I assume that’s probably going to take is going to be significant on small business owners who are already maxed out on their time.”
Matt Everson, National Federation of Independent Business state director in Iowa, said the law is going to put a burden on honest companies.
“This is a classic case of legislation that looks good until you take a closer look," he said. "The Senate wants to get tough on crime. However, with the TITLE Act, they’re just being tough on job creators. Iowa’s small business community isn’t known as a hotbed of organized crime, and the government already has the tools it needs to investigate businesses it suspects.”
Van Zante said Congress needs to go back to the drawing board.
“There has to be a better way," she said. "I can’t imagine the people they are trying to catch are the people who are going to fill out this thing appropriately. They’re not going to say, “I’m such and such person, and I’m laundering my taxes'.” They’re not going to sign up as who they are. All it’s doing is creating more hassle for the business owner who is honest in what they are doing. It’s not catching the people who are out there violating the policies.”
Senate Bill 1889, the “True Incorporation Transparency for Law Enforcement Act,” also called the “TITLE Act,” has been referred to the Judiciary Committee.