ALERT! Scammers Targeting Small Business Owners

Scammers have come up with a new twist on an old scam to collect data and unnecessary payments from owners of state-registered businesses. The scammers hit three or four primary items: 1.) EIN Tax Numbers; 2.) Certification of Existence; 3.) Annual Reports; and 4.) Corporate Transparency Act filings.

Tricksters, Scammers, Fraudsters...

Employer Identification Numbers

One of the standard steps when forming a new business is to obtain a tax identification number. Scammers “warn of dire consequences” if this step is not taken and then offer to obtain one for you for a fee. The goal of most of these organizations is to obtain your critical personal information such as name, address, social security number, etc. Along with this, they want you to pay a fee for what is, after all, a free service. You can obtain your EIN through the IRS.GOV website free of charge. If you need assistance, please contact a tax or legal professional.

Certificate of Existence

Scammers provide very official looking letters and/or emails to trick new business owners into obtaining a certificate of existence for a generous fee. The truth, however, is that a certificate is generally not necessary unless a bank or other business requests it. Certificates can be obtained through the Secretary of State or Corporations Division for a nominal cost, and here’s the kicker, an “old” certificate is generally worthless since a bank would want a current one before finalizing a loan. If you need a certificate of existence, just go to the government website and request one.

Do you need it, really?

Annual Reports

Some states require annual reports at a fixed date while others use the anniversary of your business formation. Scammers use official looking forms and emails to demand an annual report and the business fee or excise tax that may or may not come with it. The fraudsters create a moment of panic using these methods to get you to reveal confidential information and to steal your money. Things to look for: 1.) A filing date inconsistent with legitimate filing deadline with relevant government agency…if the form reports an incorrect deadline, the notice is likely a scam; 2.) A fee that is inconsistent with legitimate filing fees…a quick check would reveal the actual fee or indicate that no fee is owing; and 3.) Illegitimate contact information or misspelling of your entity’s official name or your name. If you are unsure, contact your tax or legal professional before using any such service.

Don't expend your hard-earned money on scams!

Corporate Transparency Act Filings

Approximately a year ago, FinCEN withdrew many of the corporate transparency act filing requirements for domestic companies. Scammers are still trying to frighten legitimate business owners into paying to file a CTA report…and then continue to file updates that are unnecessary. In the event a CTA report is needed, it can be filed through the FinCEN website at no cost. If further information is needed, you can contact your tax or legal professional or research it yourself at the www.fincen.gov/boi website.

In conclusion, don’t just accept an official looking form, letter or email as legitimate. Be careful and check before exposing your personal information and paying fees to fraudsters.

Curry Andrews, Attorney