WASHINGTON — It takes more than a profit to keep a business open: Owners and operators are required to follow many rules and laws, too.
That’s why when a local business owner got a letter demanding personal information, she got suspicious–and asked us to VERIFY.
THE QUESTION:
Do business owners now have to give the government more information–or face penalties and possible imprisonment?
THE SOURCES:
THE ANSWER:
Yes, the government is requiring more personal information about business owners–but look out for scammers trying to take advantage of your confusion.
WHAT WE FOUND:
Verify viewer Deirdre H. is a local small business owner. She reached out to the Verify team after receiving this letter:
Let’s start with what’s true. Congress passed the Corporate Transparency Act in 2021. That means lots of small businesses have to file new paperwork with the Treasury Department’s Financial Crimes Enforcement Network, like listing the personal information of their owners, as a way to reduce money laundering.
Business owners have until the end of this year to comply, or else face a fine of $500 per day and possible jail time.
It claims to be from the U.S. Department of Records Management–which doesn’t exist.
The letter also points to a .us website, while all official government sites use .gov. According to the Department of Commerce, anyone in the US or its territories can get a .us domain name.
The site didn’t work when we tried to access it, but the Better Business Bureau has an entry for it in its Scam Tracker.
So while the government is requiring more personal information about business owners scammers could be trying to take advantage of the changes.