The “Corporate Transparency Act” enacted by congress over Trump’s veto in 2020 — and taking effect now — creates a massive database of driver license image scans and passport scans at risk of being leaked and abused by the IRS
Due to a law enacted by congress in late 2020 and taking effect now, IRS agents will soon have broad access to a newly created database containing driver’s license image scans of an estimated 30 million Americans subject to the misnamed “Corporate Transparency Act.”
The database access is a concern as the IRS routinely fails to safeguard private information, as documented by numerous watchdog audits of the agency and large scale thefts and leaks of personal taxpayer files. The agency is also sloppy in its basic due diligence: it recently got busted by its official government watchdog for not properly using secure bins when disposing of printouts of private tax files.
President Trump in Dec. 2020 vetoed the Corporate Transparency Act but the measure was tucked inside the must-pass defense authorization bill (NDAA) and Trump’s veto was overridden by congress.
Now in effect this year, the Corporate Transparency Act requires small businesses and family farms to submit to the federal government the following pieces of information for each “beneficial owner” or else “be subject to criminal penalties of up to two years imprisonment and a fine of up to $10,000.”:
-Name of each individual (this could be dozens of individuals per small to mid sized business)
-Date of birth of each individual
-Address of each individual
–“An identifying number from an acceptable identification document such as a passport or U.S. driver’s license”
-“an image of the identification document used to obtain the identifying number“
A driver’s license typically contains your photograph, date of birth, address and driver’s license number, not to mention your height, weight, eye color and medical designations.
Here is a screenshot of Treasury’s FAQ page:
IRS employees get special access to the database. As noted by Treasury:
“The CTA provides Treasury with a unique degree of access to BOI, making the information available to any Treasury officer or employee (1) whose official duties require BOI inspection or disclosure, or (2) for tax administration.”
The IRS is part of the Treasury Department and Treasury makes clear its employees will have their search results returned immediately:
“Treasury personnel will be able to access and query the BO IT system directly using multiple search fields with results returned immediately.“
IRS agents are not the only ones who will gain access to the driver license database:
And here is a screenshot of the civil AND criminal punishments for failure to comply:
(Side note: You’ve got to love how the government constantly raises the penalty due to inflation. It started at $500 but already increased to $591 during the high-inflation Biden administration.)
Most members of congress did not read or fully understand the Corporate Transparency Act, which if truthfully named would be called the “Unconstitutional Small Business and Farmer Harassment Act.”
Taxpayer privacy is simply not a priority for the IRS. The IRS cannot even be bothered to properly use secure bins when handling printouts of your most sensitive information.
The new federal driver license database created by the Corporate Transparency Act also increases the risk of identity theft, and such cases took the IRS an average of 676 days to solve in 2024.
It is only a matter of time before the new database will be compromised by internal or external individuals.
