Farm groups, including the Oregon Cattlemen’s Association, are urging Congress to repeal the Corporate Transparency Act, a law currently under review by a federal appeals court.

The American Farm Bureau and National Cattlemen’s Beef Association also were among the more than 100 trade groups signing a letter last month supporting legislation to discard the act.

Businesses with fewer than 20 employees or sales under $5 million must send photos, birth dates and contact information of owners and managers to the Treasury Department’s financial crimes unit by the end of the year.

The trade groups, representing dozens of industries, called it the biggest data collection regime in the history of the U.S. outside the tax code, but still unlikely to have much practical use to law enforcement.

“Criminals are unlikely to self-report,” the letter reads.

The Biden administration and Democrats, who have come to the act’s defense, say the law will expose shell companies and bring the U.S. in line with international anti-money laundering standards.

To fight crime such as drugs and arms smuggling, terrorism funding, illegal logging and wildlife trafficking, 32 million small businesses must report, the Treasury Department estimates.

Federal financial investigators will be able to share the information with other federal agencies; state, local and tribal law enforcement agencies; and prosecutors from foreign countries. 

An Alabama judge in March ruled the law exceeded Congress’ power to regulate foreign affairs and commerce. The ruling applies only to members of National Small Business United, which filed the lawsuit.

Everyone else must still report, according to the Treasury Department, which appealed the lower court ruling to the 11th U.S. Circuit Court of Appeals. The court will hear arguments in mid-September in Birmingham, Ala. An exact date has not been set.

Small Business United attorneys are asking the appeals court to broaden the ruling to all businesses. The attorneys argue the law violates the Fourth Amendment’s protection against unreasonable searches, an issue the Alabama judge didn’t address.

Small Business United attorneys call the Corporate Transparency Act a 21st century version of 18th century laws that allowed British officials to search colonial vessels without a warrant, sparking a revolution.

Where does it stop? Small Business United attorneys asked in a brief filed this week. Since photographs can be manipulated, will cheek swabs be next? they asked.

Wyden defends law

Oregon Sen. Ron Wyden and four other Democrats filed an amicus brief defending the law as a “garden-variety” exercise of Congress’ powers and that it was necessary to align with international standards.

Rhode Island Sens. Sheldon Whitehouse and Jack Reed, Massachusetts Sen. Elizabeth Warren and California Rep. Maxine Waters joined Wyden in filing the brief.

Small Business United attorneys said it was disconcerting the five lawmakers would find the unprecedented dragnet of personal information without a warrant “garden-variety.”

Congress’ powers and citizens’ rights are defined by the Constitution, not international standards, the attorneys stated.

Farm groups and other trade associations addressed their letter to Sen. Tommy Tuberville, R-Ala., and Rep. Warren Davidson, R-Ohio, the sponsors of legislation to repeal the Corporate Transparency Act.

In a floor speech, Tuberville said he was concerned about how the Internal Revenue Service will use the information. “Criminals don’t go by the law. Instead, the law will be used to go after hard-working Americans.”