A judge in the U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act, which affects dental practices, is unconstitutional.
Here are six things for dentists and dental leaders to know about the ruling, according to a March 11 news release from the American Dental Association:
1. The act requires certain businesses to report ownership information to the U.S. Department of the Treasury's Financial Crimes Enforcement Unit in an attempt to combat tax evasion and money laundering.
2. The "unconstitutional" ruling only applies to the plaintiffs in the case, which means the federal legislation stays in place for all other businesses.
3. Dental practices that employee fewer than 20 people and generate less than $5 million in annual revenue still have to report.
4. In the case, National Small Business United v. Yellen, the court determined that Congress does not have the ability to force companies to report personal stakeholder information to the enforcement unit.
5. The lawsuit alleged that the act violated the First, Fourth, Fifth, Ninth and 10th amendments because of its disclosure requirements.
6. The Treasury and the Financial Crimes Enforcement Unit are expected to appeal the decision.