Business Blog
Looking for an Employer Identification Number (EIN)? The FTC warns businesses and consumers to watch out for IRS imposters
Maybe you’re opening a small business or hiring a household employee? Or you’re starting a nonprofit or administering an estate? If you’re creating or reorganizing a legal entity, chances are you’re going to need an Internal Revenue Service (IRS)-assigned Employer Identification Number (EIN) to file your taxes and confirm your organization’s identity. The IRS’s website has a free and easy tool to get one, but scammers don’t tell you that.
Today, FTC staff sent letters to EIN filing and delivery businesses warning the recipients that these kinds of businesses sometimes maintain websites that have generated consumer complaints. Such websites may create a false impression about affiliation with the IRS and if so, the businesses that maintain the sites may violate the FTC Act and the Impersonation Rule.
If you're selling EIN filing and delivery services, here’s what to know:
Take time for a compliance checkup. Make sure you’re being clear about who you are and the services you provide. Don’t suggest you’re associated with the IRS if you’re not, and don’t say or imply that people must pay in order to get EINs.
It's illegal to misrepresent who you are or who you are affiliated with. If you pose as or misrepresent your affiliation with a government entity or business, you may violate the FTC’s Rule on Impersonation of Government and Businesses and the FTC Act. And violation of the Rule puts civil penalties, refunds to injured consumers, and other remedies on the table. That could be an expensive illegal proposition.
And if you’re a small business or consumer forming or reorganizing a legal entity and need an EIN:
Go directly to the IRS website to get an EIN for free using the IRS’s online tool. You’ll need your business entity type, the taxpayer ID number of whomever controls your organization, and, if you’re a third-party designee assisting someone else, signed authorization to apply. The IRS has plain-language instructions you can review before getting started.
Report imposters to the FTC. If you see someone posing as the IRS – or any other government entity or business – to trick you into handing over your cash or otherwise mislead you, we want to hear about it. Help us fight fraud by telling us what happened at ReportFraud.ftc.gov.