This week the Treasury Department took the important step of finalizing its Corporate Transparency Act rules. While the move was cheered by the broader Main Street business community, a small contingent on social media has been spinning it as a “win for criminals.”

For example, here’s the start of a multi-part thread from former Congressman Tom Malinowski that’s laden with falsehoods:

The reality is that the CTA, as designed, does little to catch actual criminals, and instead penalizes millions of law-abiding business owners instead. Real criminals don’t self-report. Drug traffickers, money launderers, and arms dealers won’t voluntarily submit accurate beneficial ownership information. As we’ve said before, can you imagine Tony Soprano sitting in his kitchen filling out forms identifying the senior members of his crime family and which enterprises they benefit from?

Instead, the burden will fall on honest business owners navigating a massive, unwieldy database. With 30+ million business entities reporting multiple beneficial owners each, that’s 100+ million records for law enforcement to sift through without any targeted leads or probable cause. Finding actual criminals in that haystack is practically impossible. Add in the complexity of compliance and steep penalties, and the CTA looks less like a tool to catch criminals and more like a compliance nightmare.

The CTA was also never about tax administration. It’s a blanket reporting requirement imposed on every business owner without individualized suspicion, essentially a mass privacy invasion. That’s constitutionally problematic and practically ineffective. Treasury’s exemption for certain entities is appropriate and overdue. Law-abiding business owners shouldn’t have to surrender their privacy to a federal database simply because they formed an entity.

S-Corp and its allies have fought the CTA since its inception more than five years ago. As dubious claims about the CTA continue circulating online, we’re compiling this resource guide so you can fact-check the next misleading thread you encounter. The evidence speaks for itself, so be sure to share these materials when you see false claims.

CTA Resources